peHUB Wire: Monday, August 10, 2009

Early delivery this morning, as I have a 10:10am spot on CNBC (they don’t quite believe in my laundry room setup, which means I actually need to leave the house).

Our scheduled topic: “Is private equity back?” The answer, of course, rests largely on how you define “back.” Or, for that matter, how you define “away.” So here are four different definitions, with corresponding answers. Really hoping I settle on one within the next hour or so, because multiple choice makes for bad television (save for game-shows).

Back [bak], 1: The public is beginning to take positive notice of private equity again, due to a building trickle of IPOs and Blackstone’s rising stock price (a bogus, but pervasive, barometer). Narcissistic evidence for this can be seen in the Dan Primack CNBC Appearance Index, which spiked in 2007 and has been largely inactive until August 10, 2009. Many experts note that the DPCNBCA is predictive of PE market visibility, but utterly irrele! vant in terms of PE market performance or health.

Back [bak], 2: Private equity deal volume has significantly increased, particularly as a percentage of the overall M&A market. This is one of those things that is difficult to perceive, but which we’re told is real. Like string theory or Glen Beck’s sanity. Thomson Reuters data for July shows PE deal-making rose to $13 billion, compared to just $7.39 billion the prior month, for its busiest showing since last August. Moreover, the July increase came amid an overall decrease in M&A activity, thus making it all the more impressive and improbable. Worth noting, however, that a majority of the activity came outside North America, where credit is often still easier to come by.

Back [bak], 3: Private equity fundraising is on an upswing, thus proving long-term PE market support. In the words of Will Smith (in each of his films since 6 Degrees of Separation): “Awwww… hell no.” Private equity fundr! aising continues to be sluggish, particularly as many institutional in vestors have not yet had enough time to digest the public market rebound (i.e., recognize it, hold a board meeting, agree to begin making new commitments). And it’s not just demand. Many PE firms themselves wrote off 2009, instead opting to ramp up fundraising in 2010. Expect LP mailboxes to be stuffed full of blue books come January.

Back [bak], 4: Private equity is a “follower” [foll-O-er] asset class, thus a public market comeback translates into a private market comeback. First, rising public markets help smooth the way for PE-backed IPOs, including last week’s Avago Tech offering and this week’s Emdeon offering. This leads to distributions (or at least the promise of distributions), which leads to LP commitments which leads to new deals. It also causes public companies (i.e., strategic acquirers) to worship their paper values again, which facilitates their willingness to part with actual cash. Your basic ripple effect, which is further amplified by rising ! fair-market valuations (and you thought FAS 157 could only be used for evil)…

Give me a quick moment while I do the math… Seems private equity is “back,” by a 3-1 score. It’s not quite a sweep (no, New York readers, I do not want to talk about it), but a solid victory nonetheless. Per usual, however, I encourage you to tell me where I erred…

Top Three

Amalfi Semiconductor, a Los Gatos, Calif.-based developer of CMOS RF and mixed-signal chips, has raised $24 million in Series C funding. Battery Ventures led the round, and was joined by return backers DCM, Globespan Capital Partners and Trinity Ventures. The company previously raised around $33 million.

Excellere Partners has agreed to acquire MTS Medication Technologies Inc. (Nasdaq: MTSI), a -based provider of medication adherence packaging systems. The deal is valued at approximately $37 million, or $5.75 per share. Raymond James & Associates is serving as MTS’ financial advisor.

Steve White has joined Sigma Partners as an entrepreneur-in-residence, working out of the VC f! irm’s Menlo Park office. He is the founder of two former Sigma portfolio companies — Logic Modeling and 0-in Design Automation — is a limited partner in four Sigma funds.

VC Deals

Paymetric Inc., an Atlanta-based provider of enterprise payment acceptance solutions, has raised $8 million in Series B funding. Palomar Ventures led the deal with a $5 million investment, and was joined by return backer Austin Ventures.

Symwave Inc., a Laguna Nigel, Calif.-based chipmaker focused on “sync-and-go” applications, has raised $4 million from SMSC (Nasdaq: SMSC), as part of a strategic partnership. The company previously raised around $25 million in VC funding, including a $10.18 million Series C extension late last year at a pre-money valuation of around $27.6 million. Participants on that deal included CMEA Capital and Kodiak Venture Partners.

Curemark, a Rye, N.Y.-based develop! er of drugs that address certain gastrointestinal and pancreatic secretory deficiencies, has raised $6.5 million in Series A funding. No investor information was disclosed. The company’s lead candidate focuses on autism, and will soon enter Phase III clinical trials.

Akademos Inc., a Norwalk, Conn.-based operator of an online textbook exchange, has raised $2.5 million in first-round funding, according to a regulatory filing. No investor information was disclosed.

Buyouts Deals

Platinum Equity reportedly is in exclusive talks to acquire Grass Valley, the digital film and broadcasting systems unit of French media tech group Thomson SA. Deutsche Bank is advising Thomson on the deal.

AnaCap Financial Partners has agreed to acquire UK invoice financer Cattles Invoice Finance from Cattles PLC, for £70 million.

PE-Backed M&A

Zynga, a San Francisco-based social gaming company, has acquired MyMiniLife Inc., a social networking site that lets users build and decorate environments. No financial terms were disclosed. Zynga has raised around $45 million in VC funding from firms like Kleiner Perkins Caufield& Byers, Institutional Venture Partners, Avalon Ventures, Foundry Group and Union Square Ventures.

PE Exits

Merge Healthcare Inc. (Nasdaq: MRGE) has agreed to acquire Confirma Inc., a developer of computer assisted detection software for medical imaging. The all-cash deal is valued at around $22 million. Confirma has rai! sed over $36 million in VC funding, from firms like Fluke Venture Partners, Northwest Venture Associates, Prism VentureWorks, Versant Ventures and Telegraph Hill Partners.

Versata Enterprises Inc., an enterprise software subsidiary of Trilogy Inc., has acquired Everest Software Inc., a Dulles, Va.-based provider of a business operating system for small and mid-sized businesses. No financial terms were disclosed. Everest Software has raised around $20 million in VC funding, from firms like Boulder Ventures, New Vantage Group, Updata Partners and Sierra Ventures.

Firms & Funds

BIOptima Advisors has launched as a consulting firm for therapeutics-based companies, with clients that include biotech companies, pharma companies and venture capital firms. The New York-based group was launched by Elizabeth Czerepak and Stefan Reyser, who previously co-founded Bear Stearns Health Innoventures, a $212 million VC fund.

Opus Capital is raising its second fund with a $250 million target and $350 million hard cap, according to VentureWire. The Menlo Park, Calif.-based firm closed its debut vehicle in 2006 with $280 million in capital commitments (technically Fund V, following earlier vehicles when part of the Opus team was known as Weiss Peck & Greer Venture Partners). Past LPs have included CalPERS, Aon Pension Plan, VenCap, State of Oregon, Mesirow Financial Private Equity, Northern Trust, Portfolio Advisors and the DuPont Pension.

Human Resources

Stephen CuUnjieng has joined Evercore Partners as a senior advisor in Asia. He previously was with Macquarie Group as a vice chairman.