At about this time last year, Madison Dearborn Capital Partners was one of the private equity market’s most talked-about firms. It and its consortium partners had just bailed onan agreement to buy Canadian telco BCE for C$34.8 billion, after failing to obtain positive solvency opinions. That move led BCE to sue for aC$1.2 billion breakup fee, which MDCP and its partners vowed to fight.
The Chicago-based firm also was in the midst of raising $7.5 billion for its sixth fund — down from an original $10 billion target — with around $4 billion already secured.
In 2009, however, MDCP fell off the front pages (including ours). It participated in very few deals — including no traditional LBOs we could find — and did not hold any substantive interim fund closes. In fact, the only time MDCP was the focus of a peHUB post was in June, when firm co-founder David Mosher resigned after a 17 year run (he was in charge of investor relations and! other non-deal activities).
I spent some time speaking with sources close to the firm, and learned the following nuggets:
• MDCP VI remains in fundraising purgatory, stuck at just a tick above $4 billion. The firm wants to hold a final close next quarter, but is unsure about how much more fund capital it can secure.
• Early investments out of MDCP VI are being co-invested 50/50 with MDCP V, because the earlier fund has unexpected dry powder due to the BCE deal collapse. Continues to make me wonder how badly MDCP really wanted to get BCE done in the end, given the flexibility afforded the firm by a deal failure.
• MDCP invested around $300 million into a small handful of deals in 2009. These typically were “structured equity” transactions, like leading a $360 millionSeptember investmentinto NextG Networks.
• MDCP distributed between $630 million and $650 million to LPs in 2009, oftenbased onshare sales of public portfolio companies.
• Benjamin Chereskin, an MDCP co-founder and managing director, left the firm in September.
• The battle over the BCE breakup fee continues, which means the only money handed over so far has been to attorneys.
*** Data Point: Over the past decade, there were 666 VC-backed IPOs on U.S. exchanges, raising $66.6 billion. Statistical symmetry or pure creepiness?
*** A big welcome back to Connie Loizos, who has been out for the past several months on maternity leave. Connie will resume her VC beat for peHUB from San Francisco, and can be reached at connie.loizos@thomsonreuters.com.
Also, a huge thanks to Deborah Gage for filling in while Connie was out. Particular kudos for her dogged reporting on the Canopy Financial situation. Happy trails…
Top Three
Bain Capital has agreed to invest to up $124 million into Himadri Chemicals & Industries Ltd., an Indian maker of coal tar pitch and other carbon products. The deal would give Bain a maximum ownership stake of just over 36 percent. This is Bain’s first investment in India since opening an advisory office in Mumbai in 2008.
ReVance Therapeutics Inc., a Mountain View, Calif.-based drug developer focused on dermatology and aesthetic medicine, has held a $25.62 million first close on a $35 million Series D funding. Essex Woodlands Healthcare Ventures led the round, and was joined by fellow return backers Vivo Ventures, Technology Partners, Shepherd Ventures, Palo Alto Investors, Bio*One Capital and Pac-Link Ventures.
The San Francisco Employees’ Retirement System (SFERS) has named Donald Holcher as managing director of alternative investments and real estate. It is a new position. He previously had spent 10 years as a real estate investment officer with SFERS.
VC Deals
Segetis Inc., a Plymouth, Minn.-based tech startup focused on renewable chemical products, has secured $17.24 million of a $22 million Series B round, according to a regulatory filing. It previously raised a $15 million Series A round led by Khosla Ventures.www.segetis.com
Kakai Inc., a Santa Clara, Calif.-based e-book startup from Chegg.com co-founder Osman Rashid, has raised $7.5 million in VC funding, according to a regulatory filing. Andreessen Horowitz led the round, and PaidContent reports that individual backers include Josh Kopelman and Ron Conway. The company previously raised just over $1 million in seed funding.www.kakai.com
Jingle Networks Inc., a Billerica, Mass.-based operator of a national consumer telephone directory assistance service, has raised $6.75 million in fifth-round funding, according to a regulatory filing. The company previously had! raised over $82 million, fromfirms like Goldman Sachs, Hearst Corp., Flybridge Capital Partners, Liberty Associated Partners and Comcast Interactive Capital. www.free411.com
PowerReviews Inc., a San Francisco-based provider of customer reviews and social merchandising solutions for online retailers, has secured $4.93 million of a $9 million financing round, according to a regulatory filing. The company previously raised around $21.3 million over two funding rounds, from Draper Richards, Menlo Ventures and Tenaya Capital (fka Lehman Brothers Venture Partners). www.powerreviews.com
SCVNGR Inc., a Boston-based operator of mobile tech-enabled scavenger hunts, has raised $4 million in new VC funding. Google Ventures was joined by return backer Highland Capital Partners. Rich Miner of Google Venturesjoined the SCVNGR board of directors.
Twilio, a San Francisco-based provider of an in-cloud API for voice communications, has raised $3.69 million in new VC funding, according to a regulatory filing. Albert Wegner of Union Square Ventures is listed as a new board member, while the company previously raised seed funding from Founders Fund.
Whiskey Media LLC, a Corte Madera, Calif.-based network of websites like ComicVine, GiantBomb and AnimeVice, has raised $2.5 million in equity funding, according to a regulatory filing. No investor information was listed. Whiskey Media was founded last year by Shelby Bonnie, co-founder of CNet.
EcoFactor, a Redwood City, Calif.-based provider of residential energy management solutions, has raised $2.4 million in new VC funding led by Claremont Creek Ventures.
Amcom Software Inc., an Eden Prairie, Minn.-based provider of unified communications solutions, has raised an undisclosed amount of VC funding from Norwest Equity Partners and Split Rock Partners.
Dicerna Pharmaceuticals! Inc., a Cambridge, Mass.-based RNA interference company, has signed a research collaboration and license agreement with Japan’s Kyowa Hakko Kirin Co. Ltd. (TSE: 4151). The deal includes a $4 million up-front cash payment, plus up to $120 million in milestone payments. It also includes an option to expand the scope of the collaboration by adding approximately up to 10 targets under similar terms. Dicerna has raised over $21 million in VC funding from Abingworth Management, Oxford Bioscience Partners and Skyline Ventures.
NeurAxon Inc., a drug company focused on pain management, has raised $8.75 million of unsecured subordinated 2.0% convertible debentures. CTI Life Sciences Fundled the deal, and was joined by existing NeurAxon investors Delphi Ventures, OrbiMed Advisors, Ventures West Capital, H.I.G. Ventures, BDC Venture Capital, NeuroVentures Fund and Lawrence Bloch. The company previously raised over$32 million in VC funding, and has offices in both Waltham, Mass. and Toronto.
Buyouts Deals
Accel-KKR has completed its $40.82 million acquisition of the assets and liabilities of customer service software provider KANA Software Inc.
Bain Capital has completed its $1.1 billion buyout of Japanese call center operator Bellsystem24, from Citigroup.
Boyd Casinos (NYSE: BYD) made a nonbinding offer for bankrupt Station Casinos of $2.45 billion in cash and assumed debt. Station was taken private for $5.4 billion in 2007 by Colony Capital.
Clear Channel said that its outdoor unit completed a $2.5 billion high-yield debt sale, with proceeds used to repay debt owned by Clear Channel. The radio operator was bought in 2008 for $17.9 billion by Bain Capital and THL Partners.
Goldman Sachs Capital Partners has agreed to acquire a 9.4% stake in Indian insurance and healthcare ! conglomerate Max India (BO: MAXI), for a rupee equivalent of ar ound $115 million. www.gs.com
iCrossing, a digital marketing firm backed by Goldman Sachs and Oak Investment Partners, reportedly is holding talks with potential suitors. The WSJ reports that iCrossing initially received an unsolicited bid from Hearst Corp., which was deemed to be too low.
Sentinel Capital Partners has acquired Massage Envy LLC, a Scottsdale, Ariz.-based provider of therapeutic massage services. No financial terms were disclosed.
Standard Chartered Private Equity has agreed to invest $22.3 million into Sangle Solar Energy Co Ltd., a Chinese maker of branded solar water heaters.
Thoma Bravo has agreed to acquire AMICAS Inc. (Nasdaq: AMCS), a Boston-based provider of image and information management solutions. The deal is valued at approximately $217 million, with AMICAS stockholders to receive $5.35 per share (21% premium to last Thursday’s closing price). Raymond James & Associates is serving as financial advisor to AMICAS, which may solicit alternative proposals for the next 41 days.
Webs ter Capital and Sorenson Capital have acquired ReBath, a Tempe, Ariz.-based franchisor of residential bathroom remodeling services. Fifth Street Capital provided leveraged financing. No pricing terms were disclosed.
PE-Backed IPOs
Codexis Inc., a Redwood City, Calif.-based provider of solutions for pharma chemical process development and manufacturing, has filed for a $100 million IPO. The company has raised just over $80 million in VC funding since 2002, from firms like CCTV Investments, CMEA Ventures, Pequot Capital, Bio*One Capital and Pfizer. It canceled a previous $100 million IPO attempt in September 2008.
SS&C Technologies Inc., a Windsor, Conn.-basedfinancial management software company backed by The Carlyle Group, has filed for a $300 million IPO. It reported nearly $200 million in revenue for the nine months ending Sept. 30, down from $211.7 million in the same period a year ago. The company had canceled a proposed $200 million IPO in October 2008.
PE-Backed M&A
Anesiva Inc. (Nasdaq: ANSV) has canceled its previously-announced reverse merger with Arcion Therapeutics, a Baltimore-based biotech company focused on alleviating pain associated with diabetic neuropathy. Anesiva said it was unable to satisfy certain closing conditions, and that it will file for bankruptcy. Arcion has raisedover $17 million in VC funding from firms like CMEACapital and InterWest Partners.
Artifact, operator of an online auction marketplace, has merged with Auctionzip, a directory of live auction listings. The combined company also announced that it has raised $13 million in VC funding from Commonwealth Capital Ventures and Ascent Venture Partners.
Gulf Marine Maintenance and Offshore Service Co. (GMMOS), ! a UAE-based provider of marine services to the offshore oil & gas industry, has acquired Minnow Marine Projects Ltd., owner of an offshore support vessel fleet that includes four platform supply vessels (PSV) and six multirole utility vessels (MUV) valued in excess of $200 million. GMMOS is backed by Abraaj Capital and Waha Capital.
Metalmark Capital has provided an undisclosed amount of equity capital to Texan oil and gas company Jones Energy,to support its subsidiary’s purchase of bankrupt Crusader Energy Group LLC. Wells Fargo Securities arranged debt financing.
Pemco World Air Services, a Dothan, Ala.-based provider of aircraft MRO services, has agreed to acquire the 757 cargo conversion operations and assets of Alcoa-SI! E Conversions LLC. No financial terms were disclosed. Pemco World is a portfolio company of Sun Capital Partners.
Service Net Warranty LLC, a Jeffersonville, Ind.-based portfolio company of H.I.G. Capital, has agreed to acquire the assets of Equiguard Inc., a Westmont, Ill.-based provider of warranty programs to the heating, ventilation and air-conditioning markets. No financial terms were disclosed for the deal, which is expected to close by tomorrow.
Syncreon, an Auburn Hills, Mich.-based contract logistics and supply chain management company, has acquired NAL Worldwide Holdings Inc., an Addison, Ill.-based provider of third-party logistics and supply chain services to the telecom, retail, tech and healthcare sectors. No financial terms were disclosed. Synecron is a portfolio company of GenNx360 C! apital Partners, while NAL had been owned by Lake Capital.
PE Exits
II-VI Inc. (Nasdaq: IIVI) has agreed to acquire Photop Technologies Inc., a Fuzhou, China-based manufacturer of photonics products. The deal is valued at approximately $77.6 million, including $45.6 million in cash and 1.15 million shares of II-VI common stock. It also includes unspecified earnouts. Photop had raised $10 million in 2007 from VC firm Walden International.
Drugstore.com Inc. (Nasdaq: DSCM) has agreed to acquire Salu Inc., operator of online retailer SkinStore.com. The deal is valued at $36 million, with half to be paid in cash and half to be paid in Drugstore.com stock. Salu has raised around $40 million in VC funding since 1999, from firms like Atlas Venture, El Dorado Ventures and Lumira Capital.
Energy Recovery Inc. (Nasdaq: ERII) has acquired Pump Engineering LLC, a New Boston, Mich.-based provider of centrifugal turbine energy-saving technology for seawater and brackish desalination applications. The deal is valued at approximately $26.7 million, including $20 million in cash and one million shares of Energy Recovery common stock. Pump Engineering raised an undisclosed amount of VC funding earlier this year from Plymouth Venture Partners.
Goldner Hawn Private Equity has completed its $208 million sale of Vitality Foodservice Inc., a Tampa, Fla.-based dispensed beverage business, to Nestle Professional.
Nuance Communications Inc. (Nasdaq: NUAN) has acquired SpinVox, a London-based provider of voice! -to-screen messaging solutions. The deal is valued at $102.5 million, including $66 million in cash and approximately 2.3 million shares of Nuance common stock. SpinVox had raised over $125 million in VC funding, from firms like Goldman Sachs, GLG Partners and Toscafund.
Piper Jaffray has agreed to acquire Advisory Research Inc., a Chicago-based asset management group, for $218 million. Advisory Research is a portfolio company of TA Associates.
Sterling Partners has agreed to sell Overland Park, Kansas-based Lib! erty Propane to Inergy Propane LLC, a subsidiary of Inergy LP (Nasdaq: NRGY). According to a regulatory filing, the deal was valued at $223 million, including the assumption of $28 million in tax liabilities. www.libertypropane.net
TA Associates has sold its ownership stake in Logistics Health, a LaCrosse, Wis.-based health care delivery system serving patients in western Wisconsin, southeastern Minnesota and northeastern Iowa, to Gundersen Lutheran. No financial terms were disclosed. TA originally backed Logistics Health back in 2003, with a $72.5 million investment.
Firms & Funds
Carnegie Investment Bank, a Stockholm-based portfolio company of Altor Equity Partners and Bure Equity, said that it will spin off its asset management operations into an independent company. Altor and Bure would be the new company’s “main owners.”
Kohlberg Capital Corp. has been sued by a Michigan investor who said the investment company misstated the value of its portfolio.
Parish Capital has held first closes on two new funds-of-funds: Parish Capital III, a North American fund with a $450 million target; and Parish Europe II, a Europe-focused fund with a €250 million target. The firm announced the closings last month, but without disclosing how much had been raised. Now, according to regulatory filings, we’ve learned that Parish Capital III has secured $73 million and Par! ish Europe II has secured $73 million. The filings also indicate that the North American fund has a $600 million cap, and the European fund has a cap of approximately $502 million. www.parishcapital.com
Human Resources
Rainer Christine has agreed to join Aescap Venture, a Dutch VC firm focused on European medical companies, as a partner, effective January 1. He previously was co-founder and CEO of German-American biotools company Amaxa.
Vince Hemmer has “retired” from Chicago-based private equity firm GTCR, according to The Chicago Tribune. He had joined the firm in 1996, becoming a principal in 2001.www.gtcr.com
John Lane has been named director if investments for the Ohio Public Employees Retirement System (OPERS). He previously ran pension investments for Eastman Kodak and served as chief investment officer for the Pennsylvania Public School Employees’ Retirement System.
Paul Capital has ! promoted Andrew Rubinstein to partner. He is based in the firm’s New York office, and focuses on royalty transactions. Rubenstein joined Paul Capital in 2007, after having served as CEO of Microban International.
Robert Walls has joined Clear Channel Communications as executive vice president and general counsel. He had been a co-founder and managing director with Post Oak Energy Capital, a private equity and debt firm focused on the energy services market. Clear Channel is owned by private equity firms Bain Capital and THL Partners.
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