peHUB Wire: Monday, April 12, 2010

Greetings from the home office, where it’s good to be back after helping to judge the VCIC Finals in Chapel Hill.

For the uninitiated, VCIC is a competition in which teams of biz-school students form mock VC firms and are asked to make investment decisions. They conduct due diligence with real entrepreneurs, submit term sheets, negotiate with the entrepreneur and then get pummeled with questions by more than a dozen judges (all of whom are actual VCs or LPs save for yours truly).

This year’s winner was the University of Chicago, which clearly stood alone among an extremely-talented field. In fact, I think five or six of this year’s teams easily would have won last year’s event. The UC crew was smart (asked the right questions), smooth (seemed prepared for most hiccups) a! nd engaging (they understood how important it is to connect with a founder who may have multiple term sheets). Second place was Oxford University, while UNC placed third.

More than one thousand B-school students participated in VCIC this year, either via internal competitions, regional competitions and/or the finals. If you are a VC scouting for young talent, I would suggest you participate next year. There’s a great new crop of investors just waiting to be groomed…

*** NVCA president Mark Heesen gave a “state of the industry” talk before the VCIC kicked off last Friday, and included discussion of the Dodd Bill. Specifically, he said he was heartened that the proposal clearly distinguished between “venture capital” and “private equity.”

As we’ve discussed before, however, the Dodd Bill doesn’t actually define either asset class – instead kicking that responsibili! ty over to the SEC. It’s a tricky job, since hybrid firms would almost certainly try to game the nomenclature, in order to “become” whichever type of firm is less regulated. Moreover, enforcement of a firm’s adherence to definitional guidelines would be difficult without all firms agreeing to open up their portfolios to federal scrutiny.

So I asked Heesen how he/NVCA would suggest defining “venture capital.” He replied that would be a private discussion between NVCA and the SEC. Really, the NVCA can’t publicly express an opinion over what half of its acronym means?

In the words of two other attendees: “That was weird.”

*** Quiz Time: Can you name the early-stage VC firm that has begun pre-marketing its next fund, despite having raised hundreds of millions for its current fund less than three years ago? Hint: It’s bi-coastal.

*** Is anyone else concerned that things like PIK toggles and dividend recaps have returned to the LBO world? Some folks have the memory of gnats.

*** Internship Drive: So far we have more than 25 firms participating in our next internship drive. If your firm is looking to hire a first-year MBA to work this summer, please send me an email with any information about the job you would like posted, including a contact email for candidates. You may keep your firm name anonymous, if you’d prefer (but then make the email acct anonymous as well).

Top Three

Advent International has closed its fifth Latin American private equity fund with $1.65 billion in capital commitments. A typical investment would be between $50 million and $200 million of equity into companies with enterprise values of between $50 million and $750 million.

Liberty Dialysis LLC, a Mercer Island, Wash.-based operator of dialysis centers,has raised an undisclosed amount of new private equity funding. KRG Capital Partners led the round, and was joined by return backers Bain Capital Ventures and Ignition Partners. The company previously raised over $30 million.

IntraLinks, a New York-based provider of SaaS solutions for securing managing and sharing content, has filed for a $150 million IPO. Mo! rgan Stanley, Deutsche Bank and Credit Suisse are serving as co-lead underwriters. The company reports around $140 million in 2009 revenue, compared to around $143 million in 2008 revenue. Gross profit for 2009 was nearly $92 million, while net income was negative $24.77 million. TA Associates holds a 53.7% stake, based on a 2007 recapitalization. Rho Ventures holds a 34.4% stake via both the recap and prior investment.

VC Deals

EdgeCast Networks, a Los Angeles-based content delivery network company, has raised $10 million in Series C funding. Menlo Ventures led the round, with return backer Steamboat Ventures also participating. The company previously raised over $6 million.

ZoomSafer, a Reston, Va.-based provider of policy software to prevent distracted driving, has raised $1 million in new funding from SugarOak Holdings.

Zinch, an online social network that helps young people apply to schools, internships or jobs, has raised an undisclosed amount of VC funding from New World Ventures.

Buyouts Deals

AXA Private Equity reportedly is in talks to buy online travel company Go Voyages from Groupe Arnault for between €300 million and €350 million.

Better Capital, Jon Moulton’s new private equity firm, has acquired the UK subsidiary of Reader’s Digest out of administration. The deal is valued at £13 million.

California Pizza Kitchen Inc. (Nasdaq: CPKI) is seeking buyers. The restaurant chain’s current market cap is just over $500 million.

Denham Capital has invested an undisclosed amount of equity into Trans-Tasman Resources Ltd., an Australian compan! y that explores and develops iron sands deposits off of New Zealand.

Munchkin Inc., a North Hills, Calif.-based maker of infant and toddler products, has sold a “significant minority stake” to Ontario Teachers’ Pension Plan for an undisclosed amount.

Warburg Pincus has joined Hellman & Friedman and Silver Lake Partners on a joint bid to acquire Interactive Data Corp. (NYSE: IDC).

PE-Backed IPOs

Alpha and Omega Semiconductor Ltd., a Sunnyvale, Calif.-based chipmaker, has set its IPO terms to nearly 5.09 million common shares being offered at between $17 and $19 per share. It would have an initial market cap of approximately $420 million, were it to price at the high end of its range. The company plans to trade on the Nasdaq under ticker symbol AOSL, with Deutsche Bank Securities and Piper Jaffray serving as co-lead underwriters. It reports over $138 million in 2009 revenue, compared to $99 million in 2008 revenue. Shareholders include Sequoia Capital (16.1% pre-IPO stake), Pacific Venture Partners (3.4%) and Hantech International Venture Capital(2.7%)

JinkoSolar Holding Co. Ltd., a Chinese developer of silicon wafers for use in solar paneling, has filed a blank prospectus for its IPO, two months after postponing an offering designed to raise nearly $85 million. JinkoSolar raised $35 m! illion in 2008 from CIVC, Shenzhen Capital Group Co. and Pitango Venture Capital.

Nexsan Corp., a Thousand Oaks, Calif.-based maker of disk-based storage systems, has indefinately postponed a planned IPO due to “market conditions.” The company had planned to sell five million shares at between $10 and $12 per share, withThomas Weisel Partners serving as lead underwriter. Nexsanhas raised over $17 million in VC funding since 2003, from firms like VantagePoint Venture Partners (23.2% pre-IPO stake), GESFID (20%), RRE Ventures (6.9%) and Beechtree Capital.

RealD Inc., a Beverly Hills, Calif.-based licensor of stereoscopic (aka 3-D) technologies, has filed for ! a $200 million IPO. It plans to trade on the NYSE under ticker symbol RLD, with J.P. Morgan and Piper Jaffray serving as co-lead underwriters. Company revenue was just over $45 million for the year ending March 27, 2009. Shareholders include Shamrock Capital Growth Fund, with a 14.8% pre-IPO stake.

Tengion Inc., an East Norriton, Penn.-based regenerative medicine company focused on replacement organs like bladders, raised $30 million via an IPO. The company priced 5 million shares at 6 per share, compared to a plan to price 4.44 million shares at between $8 and $10 per share. The company has begun trading Nasdaq under ticker symbol TNGN, while Piper Jaffray andLeerink Swann served as co-lead! underwriters. Tengion has raised over $140 million in VC funding, from Oak Investment Partners (19.6% pre-IPO stake), HealthCap (14.3%) Johnson & Johnson Development Corp. (12.5%), Brookside Capital (8.6%), Bain Capital Ventures (8.5%), Quaker BioVentures (8.3%), L Capital Partners (6.4%), Deerfield Partners and Safeguard Scientifics.

PE Exits

Brooks Automation(Nasdaq: BRKS) has acquired the intellectual property of Blueshift Technologies Inc., an Andover, Mass.-based maker of semiconductor automation equipment, according to VentureWire. No financial terms were reported. Blueshift has raised around $38 million from Atlas Venture, Intel Capital and North Bridge Venture

Goldman Sachs Capital Partners and Permira are in talks to sell Cognis, a German maker of additives for cosmetics and detergents, for at least €3.5 billion (including debt). Suitors include BASF.

Nokia has acquired MetaCarta Inc., a Cambridge, Mass.-based developer of geographic intelligence solutions. No financial terms were disclosed. MetaCarta has raised over $26 million from Chevron! Technology Ventures, Chisholm Private Capital Partners,Hunt Ventures, FA Technology Ventures, In-Q-Tel, Sevin Rosen Funds and Solstice Capital.

Nokia has completed its acquisition of Novarra Inc., an Itasca, Ill.-based provider of mobile Internet browsing software. No financial terms were disclosed. Novarra had raised around $88 million in VC funding, from JK&B Capital,Qualcomm, Fort Washington Capital Partners, Kettle Partners and Colorado Investment Securities.

PE-Backed M&A

Summit Medical, a UK medical supply platform sponsored by The Riverside Co., has acquired German orthopedic implant supplier Eska Implants AG. No financial terms were disclosed.

Human Resources

Charles Gottdiener has joined Providence Equity Partners as a managing director focused on portfolio management. He previously was chief strategy officer and head of corporate development for Dun & Bradstreet.

Joseph Greenwood has joined boutique bank Livingstone as Chicago-based head of the firm’s special situations practice. He previously was director of special situation for William Blair & Co.

Jonathan Angell has joined law firm Dechert LLP as a! London-based partner in the firm’s corporate and securities practice. He previously was a partner in Ashurst’s London office.