peHUB Wire: Friday, May 28, 2010

The U.S. House of Representatives has just begun floor debate on the so-called “tax extenders” bill (HR 4213), which is where the carried interest tax change is housed. You can watch it live here:

There has been a lot of back-and-forth movement on this issue over the past 24 hours, including possible changes to that 75/25 split and possible changes to when the change would become effective. It is expected to come to a vote today, at which point the Senate can have at it (even though they aren’t expected to get to it before recess).

Yesterday we published a letter sent by the NVCA to its members, which basically highlighted the legislation’s state of flux. A reader commented that “This must be killing you Dan, you really wanted to see the ‘VC carry’ get taxed as ordinary income.”

No, not “killing me.” I’m advocating for Congress to do the right thing here (as I see it), but I’m hardly expecting it. Too many false starts over the past few years, and too much anti-change lobbying for me to feel confident.

*** Your Feedback Requested: I’m once again compiling a list of “walking dead” VC firms (and perhaps a few PE firms too). If you know of some, please pass them onto me via email (not for attribution, of course).

Remember, I define “walking dead” as firms that probably still have the lights on, but which currently are unable to add new portfolio companies (although may have enough dry powder for follow-ons). They may be trying to raise new funds, or may have unofficially thrown in the towel.

I don’t do this list to be nasty to GPs, but as a warning to entrepreneurs/execs not to waste their time. From the outside, many of these firms appear totally open for business… I look forward to your feedback via e! mail or via anonymous tipline.

*** Quiz Time: Can you name the newest member of Technology Crossover Ventures? Hint: He comes from another VC firm whose name begins with “T”.

*** Clarification: Yesterday’s column on the Forbes investment management effort mistakenly referred to the parent company as G2 Investment Partners. The correct name is G2 Investment Group. Also, I provided some additional thoughts yesterday in a Reuters Insider video, which you can find here.

*** Publishing Note: We’re off Monday for Memorial Day, so your next peHUB Wire will arrive on Tuesday. The website will keep getting updated in the interim. Have a great long weekend, and go Celts…

Top Three

Toys R Us, a Wayne, N.J.-based toy retailer, has filed for an $800 million IPO. It plans to trade on the NYSE, and lists a total of nine underwriters. Not among them is KKR, which joined Bain Capital and Vornado Realty Trust in acquiring Toys R Us in 2005 for $6.6 billion.

KKR has agreed to sell East Resources Inc. to Royal Dutch Shell (NYSE: RDS) for approximately $4.7 billion in cash. East Resourcesis a natural gas company focused on the Marcellus shale.

Edgestone Venture Capital Fund, a Canadian VC firm, has agreed to merge with Bridgescale Partners, a growth equity firm based in Silicon Valley.

VC Deals

Blueprint Software Systems, a Toronto-based provider of enterprise requirements software, has raised C$14.3 million in new VC funding. Return backers include Walsingham Fund, BDC and Growthworks.

NewVoiceMedia, a UK-based developer of cloud-based contact center solutions, has raised £4 million in VC funding from Eden Ventures and Notion Capital.

FTRANS, an Atlanta-based provider of accounts receivable and credit management solutions, has raised $4 million in new VC funding. Return backers include Greenhill SAVP, New Atlantic Ventures and Total Technology Ventures.

Ogmento Inc., a New York-based “augmented reality” gaming company, has raised $3.5 million in Series A funding. Chart Venture Partners led the round, and was joined by CNF Investments and individual angels.

Reinnervate Ltd., a UK-based biotech startup focused on the growth and function of cultured cells, has raised over £1.6 million in new VC funding led byNorthStar Equity Investors. The company is a spinout from Durham University.

BlockChalk, an anonymous location-based social networking service, has raised around$1 million in seed funding. Backers include Battery Ventures, Harrison Metal, Founder Collective, Mitch Kapor, David Liu, Joshua Schachter, Josh Stylman and Tom McInerney.

BOKU Inc., a San Francisco-based provider of a payment service for those making purchases of digital and virtual goods with their mobile phones, has raised an undisclosed amount of new VC funding from Andreessen Horowitz. It previously raised $38 million, including a $25 million in Series C infusion earlier this year from DAG Ventures, Benchmark Capital, Index Ventures and Khosla Ventures.

RealDirect, a New York-based online marketing platform for homeowners looking to sell, has raised an undisclosed amount of seed funding. Greenhill SAVP led the round, and was joined byScott Kurnit ( founder), Barry Silbert (SecondMarket), Jonah Neuman (Medley Realty) and Jacob Pechenik (YellowJacket).

Buyouts Deals

Endesa (Madris: ELE) has launched a two-stage auction for the sale of its gas distribution and transmission network. Several private equity firms have expressed interest.

Kinderhook Industries has completed its $30.38 million take-private acquisition of International Absorbents Inc. (NYSE: IAX), a maker of environmentally-friendly pet care and industrial products.

Oasis Dental, a UK dentistry group that serves an equal mix of NHS and private patients, has raised an undisclosed amount of private equity funding from Partners Group and Duke Street.

PE-Backed IPOs

Ontex, a Belgian maker of diapers and wet wipes, reportedly may delay a planned flotation until the second half of this year. The company is owned by Candover, and is hoping to raise upwards of €500 million.

PE Exits

3i Group and Crédit Agricole Private Equity have agreed to sell their minority stake in Dirickx, a UK-based maker of perimeter protection products,to the Dirickx family (which now will hold 100%). No financial terms were disclosed.

Ares Management has hired Moelis & Co. to help sell Aspen Dental, a chain of dentistry practices it acquired in 2006.

Terra Firma Capital Partners reportedly is mulling the sale of a 49% stake in portfolio company EMI Group, in order to pay off debt.

Thermo Fisher Scientific Inc. (NYSE: TMO) has agreed to acquire Fermentas Internationa! l Inc., a Burlington, Ontario-based maker of molecular biology products for use by researchers in university and commercial laboratories. The deal is valued at $260 million in cash. Summit Partners made a “significant minority investment” into Fermantas in 2007, but no financial terms were disclosed.

PE-Backed M&A

GemCity Engineering and Manufacturing, a Dayton, Ohio-based contract manufacturer, has acquired Vistek Medical, an Ivyland, Penn.-based contract manufacturer of medical implant and specialized components. No financial terms were disclosed. GEM is a portfolio company of Riverside Partners.

Summit Materials, an acquisition platform in the building materials market, has acquired Continental Cement Co., a supplier of cement to customers in Missouri, Iowa and Illinois. No financial terms were disclosed. Summit was formed last fall by The Blackstone Group, Silverhawk Capital Partners and former BHP Billiton CEO Charles Goodyear. It has up to $780 mil! lion in capital commitments.

Firms & Funds

The BlackBerry Partners Fund is raising $100 million for affiliate fund focused on mobile investment opportunities in China. It is being launched as a joint venture with China Broadband Capital Partners.

Omidyar Network has committed $10 million over a two-year period to the Social Innovation Fund, a public-private partnership launched last year to support social entrepreneurs and innovative nonprofit organizations.

Human Resources

John Veronis announced that he has “withdrawn” from Veronis Suhler Stevenson, the firm he co-founded over two years ago (originally an I-bank, now a PE/structured finance investment firm). He will continue to honor LP commitments to VSS funds, but will not participate in firm management going forward.