peHUB Wire: Friday, January 29, 2010

The Teamsters were out in semi-force on Tuesday morning, protesting a speaking appearance by KKR partner Alex Navab at the PEA Outlook conference in New York City. A bit of jeering, but mostly just handing out yellow one-sheets about how KKR portfolio company Dollar General shouldn’t win any Employer of the Year awards.

You can view the flier here. For those who can’t/won’t click, it’s topped by an image of female workers in what appears to be a Chinese sweatshop, underneath which it says that Dollar General’s “private inequities” in China and the U.S. “give private equity a bad name.”

For a moment, let’s leave aside the unintentional comedy of blaming KKR for giving private equity a bad name (as if PE’s rep would be sterling if not for Henry Kravis and compan! y). Instead, let’s focus on the lead allegations.

The Chinese working condition information was originally collected last May by an advocacy group called China Labor Watch, which co-sponsored Tuesday’s protest. It was then published seven months later, alleging labor abuses in four Chinese outsourcing facilities that produced goods later sold by Dollar General in U.S. stores.

Dollar General quickly responded by denying having ever done business in two of the factories, and also saying that it no longer did business in the other two. China Labor Watch posted links to Dollar General’s denials on its website, although maintained that its original information was correct. Neither Dollar General nor KKR has commented further.

So we have some dispute, but agreement on the following point: Dollar General sourced some goods from scumbags. Dollar General also has publicly stated that it no longer uses said scumbags, and China Labor Watch tells me that it has no ! evidence to support or refute Dollar General’s claim. In an email to m e on Wednesday afternoon, CLW executive director Li Qiang wrote:

“Production work is seasonal and this inspection took place at one of the busier points in the production year — the beginning of the busy season. At this time, it is especially difficult for companies to monitor exactly where all products are made. So it is possible that DG was unaware that current production was being sourced to the factories we investigated last May. Finally, it is also very possible that now that the busy season is over, DG no longer produces in these factories.”

But the Teamsters flier implied that such labor abuses were current and ongoing. Do they just not believe the Dollar General denial? Do they know something China Labor Watch does not?

Nope. The truth is that the Teamsters didn’t do a shred of due diligence.

I as! ked group spokesman Galen Munroe if he was aware that Dollar General had said it no longer uses any of the four factories cited by CLW. He said he was not. When I told him that the denials were available on the CLW website, he said: “I can’t verify what you’re telling me.”

I said I’d wait for him to go to the CLW website — or even do a basic Google search — but he simply repeated his “Hear no evil, see no evil” matra. When I asked if anyone at Teamsters had done any research beyond reading the original CLW report, he said that he did not know. Also not knowing was another Teamsters rep he put me on the phone with. It was pathetic.

Look, I’m all for a good protest. Even a hyperbolic one. But it should be incumbant on the protesters to have at least faint clue what they’re talking about.

It’s entirely possible that Dollar General — and, by extension, KKR — have enabled some horrible labor abuses in China. And it’s also possible that some of their oversigh! t was lax. I take no stand on that one way or the other.

All I know is that I don’t know what’s happening now. Neither do the Teamsters, so they should stop implying that they do.

Top Three

Warburg Pincus has agreed to buy Survitec Group, a UK-based maker of survival equipment, from Montagu Private Equity for £280 million. The deal includes 130 million in leveraged financing from Lloyds, Bank of Ireland, HSBC, Unicredit, ING, GE and Societe Generale. Montagu had bought Survitec in 2004 for 146 million.

EDGAR Online Inc. (Nasdaq: EDGR), a distributor of public company financial filings, has agreed to sell $12 million worth of convertible stock to Bain Capital Ventures, via a private placement. Jeff Schwartz and John Connolly of Bain Capital Ventures will join the EDGAR Online board of directors.

GlassHouse Technologies Inc., a Framingham, Mass.-based provider of storage consulting and services, has filed for a $75 million IPO. It plans to trade on the NYSE, with Goldman Sachs and Credit Suisse serving as co-lead underwriters. GlassHouse has raised over $72 million in VC funding, from firms like Sigma Partners (25.81% pre-IPO stake), GrandBanks Capital (12.49%), Kodiak Venture Partners (10.75%), Paladin Capital Group (9.3%), Jafco, Cisco Systems, Montagu Newhall Associates, Shiprock Capital and Dell Computer. It had filed for a $100 million IPO in 2007, but withdrew in early 2008.

VC Deals

Merus, a Dutch developer of human therapeutic antibodies, has raised €21.7 million in Series B funding. Investors included The Novartis Option Fund, Pfizer, Bay City Capital, Life Sciences Partners and seed backer Aglaia Oncology Fund.

Flexion Therapeutics, a Woburn, Mass.-based drug development startup, has raised $9 million in new Series A funding from Pfizer’s venture capital group. This brings the round total to $42 million, including a previously-announced first close from Versant Ventures, 5AM Ventures and Sofinnova Ventures.

Rapid Diagnostek Inc., a Hudson, Wis.-based developer of one-step medical ! diagnostic devices, has raised $4 million in a VC funding round led by Peak Ridge Capital.

Buyouts Deals

Diamond Castle Partners has acquired Suture Express Inc. from Code Hennessy & Simmons and Linden LLC. No financial terms were disclosed. Suture Express is a Lenexa, Kansas-based distributor of sutures, endo-mechanical products and other disposable medical and surgical products.

Greenhill Capital Partners has invested $20 million into Acrisure LLC, a Grand Rapids, Mich.-based acquiror and operator of Midwestern insurance brokerages.

TorQuest Partners! has acquired the rosin and terpene resins business of Ashland Inc. (NYSE: ASH). The deal was valued at approximately $75 million. The newly-independent business will be renamed Pinova Inc.

Amplifon (Milan: AMPF) reportedly has been contacted by several private equity firms, for a tie-up on bids for Siemens AG’s hearing aids business.

Yucaipa Cos. has offered to pay at least $50 million for a control stake in luxury retailer Barneys New York, according to The Wall Street Journal. Yucaipa already holds much of the! company’s debt. The remainder of Barneys equity would be held by exis ting owner Istithmar World Capital.

PE-Backed IPOs

BG Medicine Inc., a Waltham, Mass.-based developer of molecular diagnostics based on biomarkers, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol BGMD, with Jefferies & Co. and UBS serving as co-lead underwriters. The company previously filed for a $72 million IPO in 2007 with Cowen & Co. as lead underwriter, but later pulled the offering due to “unfavorable market conditions.” BG Medicine has raised over $37 million in VC funding since 2000, from firms like Flagship Ventures (44.4% pre-IPO stake), Gilde Investment Management (14.1%) and Koniklijke Philips Electronics (5.6%).

Generac Holdings Inc., a Waukesha, Wis.-based maker of standby and portable generators, has set its IPO terms to 20.31 million shares being offered at between $15 and $17 per share. It would have an initial market cap of approximately $1.14 bill! ion, were it to price at the top of its range. The company plans to trade on the NYSE under ticker symbol GNRC, with J.P. Morgan and Goldman Sachs serving as co-lead underwriters. CCMP Capital and Unitas Capital bought Generac for approximately $2 billion in late 2006.

Vringo, a New York-based provider of video ringtone sharing solutions, has filed to raise $64.3 million via an IPO of stock and warrants. The company plans to trade on the Nasdaq, with Maxim Group serving as lead underwriter. It reports just $36,000 in revenue for the first nine months of 2009. Shareholders include Warburg Pincus, with a 31.9% ownership stake.

PE Exits

Informatica Corp. (Nasdaq: INFA) has acquired Siperian Inc., a San Mateo, Calif.-based maker of master data management software, for $130 million in cash. Siperian had raised around $61.5 million in VC funding, from firms like Constellation Ventures, Investor Growth Capital, Red Rock Ventures, ArrowPath Venture Capital, Blumberg Capital Ventures, Brightspark Ventures, Saffron Hill Ventures, Reed Elsevier Ventures and Anthem Venture Partners.

Oaktree Capital Management is looking to sell German flexible packaging maker Nordenia International AG for about €600 million, according to Reuters.

Firms & Funds

First Round Capital has launched a small fund designed to allow portfolio company entrepreneurs “to contribute a small piece of the stock they own in their company — and share in the upside of all the other companies.”

Human Resources

Peter Fair has joined Velocity Financial Group as a principal in the firm’s Silicon Valley office. He previously was a director with TriplePoint Capital.