peHUB Wire: Friday, June 5, 2009

On Wednesday, my colleague Alastair Goldfisher reported that NFL kicker Billy Cundiff had joined VC firm Pacific Southwest as an associate. In the spirit of massaging a dead horse, I’d like to add that Cundiff’s former Dallas Cowboys teammate Drew Bledsoe has also gotten into the private investment game.

Bledsoe — who made his bones with the beloved New England Patriots — is namesake and co-founding principal of Bledsoe Capital Group, whose investment mandate includes emerging technologies, entertainment, luxury services and real estate. Sounds opportunistically broad, but is counterbalanced a bit by BCG’s commitment to a limited portfolio. Sure that second part isn’t working out for Chris Flowers, but why judge yourself by a sad standard?

“When Drew retired, he and I had hundreds of business plans to look through, and the one guiding principal he insisted on was that we invest in companies and projects aimed at fostering a better environment and the greater good,” says Chad Wold, Bledsoe’s partner and longtime attorney. “Do good by doing well.”

Wold says that Montana-based BCG is structured like a traditional private equity fund, with institutional and high-net-worth backers supplementing Bledsoe’s personal piggybank. No details on dollars.

The firm’s first publicized investment is in Ecosphere Technologies Inc. (OTC BB: ESPH), a water engineering and services company that trades well below the $1 mark. BCG is betting on an Ecosphere technology that can clean and recycle industrial wastewater produced during industrial processes like oil and gas exploration, without the use of chemicals. According to a press release, the ”[energy] industry’s usual method of disposing of contaminated water was to either pump it back down into the ground through injection wells or create massive holding ponds.” The technology also could be employed in such instances as a bioterrorism attack.

BCG originally invested a few million into Ecosphere as a PIPE, and has since committed up to $50 million to form a joint venture that would exclusively license the Ecosphere technology (with $10m going directly to Ecosphere).

Wold says that BCG also has made several undisclosed investments, and that it is in due diligence on several other projects. On the real estate front, BCG is examining deals that would include the designation of conservation lands in the Pacific Northwest. In terms of technology, BCG is looking at GPS applications that could be used to help find lost of kidnapped children, and also at LED lightbulb applications.

*** I’ve actually got another ex-jock turned investor story in the hopper, but need to hold it until next week (pre-condition of the conversation). NBA this time, not NFL.

*** Hey Chicago: We’ll be throwing a peHUB Shindig on June 15, from around 5:30-8:30pm. Cocktails & conversation without the content. Details and tickets coming Monday morning. Be sure to mark it down on your calendar…

Top Three

Xanodyne Pharmaceuticals Inc., a Florence, Ky.-based drug company, has raised $38 million in new VC funding led by MPM Capital. Return backers include AIG Investments, Aisling Capital, Blue Chip Venture Co., Essex Woodlands Health Ventures, HealthCare Ventures and Union Springs. The company previously raised around $232 million in total VC funding, including a $170 million Series A-1 round in 2005 that helped finance the $210 million acquisition of aaiPharma’s pharmaceutical division out of bankruptcy. Last October, Xanodyne canceled a proposed $86.25 million IPO due to “market conditions.”

Procter & Gamble Co. (NYSE: PG) has bought retailer The Art of Shaving from shareholders like Capital Resource Partners. No financial terms were disclosed, although Women’s Wear Daily puts the price at approximately $60 million. CRP had provided Art of Shaving with $12 million in growth and recap funding in 2007, and reports that it generated a 34.6% IRR on the sale.

The FDIC has closed Atlanta-based Silverton Bank instead of selling it, according to The Wall Street Journal. A group of private equity firms led by The Carlyle Group had been in talks to buy Silverton, which had around $4.1 billion in assets and $3.3 billion in deposits.

VC Deals

Optimal Reading Services Group Inc., a Homewood, Ala.-based provider of medical imaging optimization services for healthcare facilities, has raised an undisclosed amount of private equity funding from Health Evolution Partners.

Transcend Medical Inc., a Menlo Park, Calif.-based developer of medical devices to treat glaucoma, has raised $35 million in Series B funding, according to VentureWire. A May 27 regulatory filing reports that the company had called down $20 million of a $40 million round. HLM Venture Partners led the round, and was joined by Canaan Partners, Latterell Venture Partners, Technology Partners and return backers Morgenthaler Ventures and Split Rock Partners.

Buyout Deals

Almatis, a German aluminum products manufacturer, has begun debt restructuring talks with its lenders. The company was acquired by Dubai International Capital in 2007, in a deal that included a $970 million leveraged loan arranged by UBS and Arab Banking Corp.

KB Financial, the parent company of South Korea’s largest bank (Kookmin) is seeing to raise up to $3 billion in new capital via a Q3 share sale. The news heightened speculation that KB may bid for smaller rival Korea Exchange Bank, which is 51%-owned by Lone Star Funds.

Topspin Partners LBO and Integris LLC have acquired the Alpharetta, Ga.-based veterinary business of Sanuwave Inc., which includes pulsed energy therapeutic products for the non-invasive management of musculoskeletal disorders causing chronic pain and lameness in veterinary patients, primarily horses and dogs. No financial terms were disclosed.

PE-Backed M&A

Satellite Holdings LLC, an antenna systems platform sponsored by The Edgewater Funds and Granahan McCourt Capital, has acquired a series of assets from ASC Signal Corp., a portfolio company of Resilience Capital. No financial terms were disclosed.

Tactical Holdings, a provider of military and tactical footwear, has acquired Massif Holdings LLC (Massif Mountain Gear), a provider of flame resistant technical apparel. No pricing terms were disclosed. Tactical Holdings is a portfolio company of Golden Gate Capital.

Victory Industrial Products, a Batavia, Ohio-based portfolio company of WHI Capital Partners, has acquired KDS International, a Terrell, Texas-based maker of gas turbine products. No financial terms were disclosed.

PE Exits

Research in Motion reportedly has acquired Dash Navigation Inc., a Mountain View, Calif.-based provider of Internet-connected automotive GPS devices. No financial terms were disclosed. Dash had raised around $70 million in VC funding since 2005, from firms like Crescendo Ventures, Kleiner Perkins Caufield & Byers, Sequoia Capital, Skymoon Ventures and ZenShin Capital Partners.

Firms & Funds

Cowen Group has agreed to merge with Ramius LLC, in a deal that would give Ramius and a third party investor in Ramius a 71.24% stake in the combined company.

Cycle Capital Management of Canada has held an $80 million first close on its inaugural fund, which will focus on VC opportunities in the cleantech and renewable energy sectors. Limited partners include Investissement Québec, the Fonds de solidarité FTQ, Fondaction, the Caisse de dépôt et de placement du Québec, Brookfield Renewable Power Inc., Cascades Inc., the Fonds d’action québécois pour le développement durable (FAQDD) and the Centrale des syndicats du Québec (CSQ). Read more! …

Human Resources

Chris Farmer has left Bessemer Venture Partners, where he had been a vice president focused on digital media and wireless companies. His board seats included Access 360 Media, Cecure Gaming and GoTV Media. No word yet on his future plans.

James von Moltke has joined Citigroup as head of the firm’s corporate mergers group, replacing Vincent Fandozzi. He previously was with Morgan Stanley.

Eric London has joined M&A advisory TTK Partners as a Chicago-based partner. He previously was an executive director with JPMorgan and, before that, worked for Bear Stearns & Co.