peHUB Wire: Friday, April 30, 2010

A handful of notes to finish out the week…

*** Last June, I wrote a bit about the future of venture firm Softbank Capital. It had just lost co-managing partner Eric Hippeau to portfolio company HuffingtonPost, and was beginning to run short of dry powder from a $230 million fund raised in 2004.

Well, that fund is now fully-committed, but Softbank Capital has quietly raised $100 million for a new fund from Tokyo-based namesake Softbank. Solo LP this time around, which differs from the past vehicle.

Ron Fisher, Softbank Capital’s remaining managing partner, told me yesterday that the firm has refined its focus a bit – moving earlier stage and specifically targeting companies in the social computing space (and mobile social computing! , in particular).

Just Asking: Last month, Cerberus Capital announced an agreement to buy Boston-based hospital chain Caritas Christi for $830 million (including the assumption of pension obligations). It promised to maintain the company’s Catholic identity, which includes significant charitable contributions, and to not sell/shut any of the hospitals or take the company public for the first three years.

My question isn’t about how Cerberus plans to turn the hospitals into for-profit institutions – there actually is a road map for that in Massachusetts, as evidenced by St. Vincent’s hospital in Worcester – but rather if that $830 million pricetag will stand.

Shortly after the deal announcement, Massachusetts’ insurance commissioner vetoed a boatload of proposed insurance premium hikes. I don’t want t debate the policy/politics of it, but here’s the upshot: The in! surers are now suing, thus throwing future reimbursement projections into limbo. If the insurers lose, then one possible outcome is that they’ll pass the extra costs onto hospitals, thus lowering future revenue (and potentially crippling a relatively small, non-teaching chain like Caritas, which has less bargaining power than the local Harvard-affiliated hospitals).

All of this uncertainty is one big reason why so many PE shops shy away from buying medical services facilities. It will be very interesting to see if Cerberus tries to add some sort of additional hedge, or if it somehow already baked such actions into the original price. Cerberus, of course, declined to discuss the situation.

*** Quiz Time: Which mid-market lender is in talks to be acquired by a private equity firm? Hint: It’s a mid-market lender that still happens to be in business (which, to be honest, s! hould narrow it down for you).

*** Quiz Time II: Which c o-founder of a mid/large-market private equity firm just announced that he was moving onto other pastures? Hint: His name has been written here “in blue” within the past month.

*** Shameless Plug: Just a reminder that Buyouts Chicago is taking place on June 17, at The Palmer House. Good speaker list, including Ed Rieckelman of Alberta Investment Management Corp. (yup, the pension fund that just offered to buy Candover). Plus, I’m sure to be moderating a panel of two. More details here.

In related news, this also means that the next peHUB Shindig will be on June 16 in Chicago. If your firm is interested in being a sponsor, please let me know via email…

*** Have a great weekend. Go Celts!

Top Three

Madison Dearborn Capital Partners has agreed to acquire a 51% equity stake in consumer credit reporting company TransUnion from the Pritzker family, which will retain the other 49 percent. No financial terms were disclosed, although the Wall Street Journal says the deal values TransUnion at around $2 billion.

The Carlyle Group has agreed to acquire $5.1 billion of credit assets from Stanfield Capital Partners, beating out a rival bid from Apollo Management. The deal includes management contracts on $4.2 billion in CLOs and $950 million in managed account assets.

Symantec Corp. (Nasdaq: SYMC) has agreed to buy two VC-backed companies: PGP Corp., a Palo Alto, Calif.-based provider of enterprise data pro! tection, and GuardianEdge, a San Francisco-based provider of endpoint data protection for the enterprise. The PGP deal will be for around $300 million in cash, while the GuardianEdge deal will be for around $70 million in cash.PGP has raised around $45 million in VC funding from firms D.E. Shaw Group, Intel Capital, DCM and Venrock. GuardianEdge raised over $10 million from Cargill Ventures, Thomvest Ventures, Altos Ventures and Cardinal Venture Capital.

VC Deals

Affimed Therapeutics AG, a German antibody developer, has raised €20 million in Series C funding. Return backers included Aeris Capital, BioMedInvest, LSP Life Sciences Partners, Novo Nordisk and Orbimed Advisors. The company said that future Series C commitments “at a later date.”

EdenIQ, a Visalia, Calif.-based developer of biofuel yield enhancement technologies, has raised $12.4 million in Series B funding. Draper Fisher Jurvetson led the round, and was joined by The Westly Group, Kleiner Perkins, Cyrus Capital, Angeleno Group,Element Partners, Morgan Stanley, Advanced Equities, Omninet andNimes Capital. The company previously raised over $33 million.

Casa Systems Inc., an Andover, Mass.-based developer of network edge devices targeting IP video and broadband IP services, has raised an undisclosed amount of growth equity funding from Summit Partners.

XOS Digital Inc., a provider of digital technology and media management solutions to collegiate and professional sports organizations, has raised an undisclosed amount of Series B funding. NewSpring Capital and Dublin Capital were joined on the round by return backers Blue Chip Venture Co. and Beechtree Capital.

! NeurogesX Inc. (Nasdaq: NGSX), a San Carlos, Calif.-based drug company focused on pain management therapies, has entered into a $40 million royalty financing agreement with Cowen Healthcare Royalty Partners. The deal is related to a dermal delivery system containing prescription strength capsaicin. In early 2008, NeurogesX sold $25 million of common stock via a private placement to SV Life Sciences. It had gone public the prior year, after raising around $90 million in VC funding.

Buyouts Deals

AIF Capital has agreed to buy a 10% stake in Oriental University City, a Chinese university owned by Singapore-based Raffles Education (SI: RLSE). The deal is valued at approximately $51.58 million.

Governance for Owners, which holds 10% of Sperian Protection (Paris: SPEP), is challenging a proposed buyout of Sperian by Cinven. GO says that it has “serious doubts about the fairness of the offer and the treatment of minority shareholders.”

Lime Rock Partners has invested NOK 50 million ($8.45m) i! nto Reelwell, a Norway-based developer of wellbore cleaning and pressure control tech solutions for drilling.

TharpeRobbins Company Inc., a developer of employee attraction and retention programs, has raised an undisclosed amount of private equity funding from Gridiron Capital. The deal also included one-stop debt and equity co-investment from Maranon Capital.

PE-Backed IPOs

Aurora Diagnostics LLC, a Palm Beach Gardens, Fla.-based diagnostic lab andanatomic pathologycompany, has filed for a $150 million IPO. It plans to trade on the Nasdaq under ticker symbol ARDX, with Morgan Stanley, Barclays Capital and UBS Investment Bank serving as co-lead underwriters. The company reports $171 million in net 2009 revenue, compared to $159 million in 2008. Its 2009 net income was $9 million, down slightly from $10.7 million in 2008. Aurora Diagnostics was formed in 2006 as an acquisition platform by Summit Partners and GSO Capital Partners. Last June, KRG Capital Partners acquired GSO’s interests in the company. Summit now holds a 51% ownership stake, with KRG holding a 34% position. The remainder is held by company

Convio shares yesterday closed up 13.8% on its first day of post-IPO trading. Alpha & Omerga Semiconductor closed down 1.7 percent.

CVC Capital Partners is planning to float half of its 50% stake in Belgian post service La Poste/De Post. The offer is expected to take place later this year, with CVC hoping to raise between €500 million and €700 million.

Express, a Columbus, Ohio-based retail apparel brand and retailer, hasset its IPO terms to 16 million common shares being offered at between $18 and $20per share. It would have an initial market cap of approximately $1.77 billion, were it to price at thehigh end of its range. The companyplans to trade on the NYSEunder ticker symbol EXPR, with Goldman Sachs and BoA Merrill Lynch serving as co-lead underwriters. It reports $1.72 billion in net sales for the year ending January 30, 2009, compared to $1.74 billion in the year-ago period. Net income jumped to $75 millionfrom negative $29 million. Golden Gate Capital acquired a 67% interest in Express in July 2007, for $548 million. The seller was Limit! ed Brands Inc. (NYSE: LTD), which remains an Express shareholder.

RealPage Inc., a Carrolton, Texas-based provider ofonline property management systems for the multi-family housing market, has filed for a $150 million IPO. It plans to trade on the Nasdaq, with Credit Suisse and Deutsche Bank Securities serving as co-lead underwriters. The company reports $28 million in net income for 2009, compared to a $3.2 million net loss in 2008. Revenue rose from $112 million in 2008 to $140 million in 2009. RealPage has raised over $40 million in VC funding since 2003, fromApax Partners (26.4% pre-IPO stake), Advance Capital Partners (6.9%), Camden Partners (4.7%) and Leeds Equity

PE-Backed M&A

Solarsoft Business Systems, a Toronto-based portfolio company of Marlin Equity Partners, has acquired Informance International Inc., a Northbrook, Ill.-based provider of enterprise manufacturing intelligence (EMI) systems. No financial terms were disclosed.

Tektronix Inc. has acquired SyntheSys Research Inc., a Menlo Park, Calif.-base maker of high-speed signal integrity test and measurement instrumentation. No financial terms were disclosed. SyntheSys had raised over $18 million in private funding from Advent International.

PE Exits

Apax Partners has agreed to sell Faceo, a French company focused on technical maintenance, to listed French construction group Vinci. No financial terms were disclosed, except that Faceo reported 2009 sales of over $570 million.

CardioMind, a Sunnyvale, Calif.-based cardiovascular stent maker, has put its assets up for sale, according to VentureWire. Gerbsman Partners is managing the process, which is expected to be concluded by early June. CardioMind has raised nearly $75 million in VC funding since 2003, fromSV Life Sciences, De Novo Ventures, InterWest Partners, Latterell Venture Partners, Morgenthaler Ventures and Onset Ventures.

Medtronic Inc. (NYSE: MDT) has agreed to acquire ATS Medical Inc. (Nasdaq: ATSI) for approximately $370 million, or $4 per ATS share. Sel! lers include Alta Partners, which bought 9.8 million shares of ATS in at $1.65 per share, and which also holds an ATS board seat. Also selling would be Essex Woodlands Health Ventures, which in late 2008 invested $20 million for 8.5 million common shares at $2.35 per share, plus another 2.5 million warrants.

Human Resources

Greg Bresner has joined SecondMarket as its first chief financial officer and head of data and analytics. He previously was COO of House Party Inc.

Lori Hoberman has joined the New York office of law firm Chadbourne & Parke as head of a newly-formed emerging company and venture capital team. She previously was with Fish & Richardson.

Steven LaDew has joined Spectrum Group Management as director of fund accounting and reporting. He previously was director of finance with Parish! Capital. Spectrum also announced that Dee Trussle, formerly with Credit Suisse’s capital services group, has joined as director of business development.

Kelly Stapleton has joined financial advisory firm MorrisAnderson as a managing director in the firm’s New York office. She is a former U.S. Trustee whooversaw the bankruptcy system for Delaware, Pennsylvania and New Jersey.

David Traylor has joined boutique I-bank Headwaters as a managing director within the firm’s life sciences group. He previously was with Caris & Company.