peHUB Wire: Monday, June 15, 2009

Bain Capital’s Steve Pagliuca has emerged as a potential bidder for The Boston Globe, which is being shopped by The New York Times Co.

Sources tell me that Bain Capital itself is not involved, as Pagliuca is said to view the opportunity more as a civic rescue than as a profit-driven investment.

“A lot of folks [in Boston] want to see the Globe saved, because of what it means to the community,” says a source familiar with the situation. “But this is not the type of deal that would work within a private equity model… the financial objectives probably would only be to return the paper to cash-flow breakeven.” (note: You can assume this source is not from Platinum Equity, which bought the San Diego Union-Tribune just two month! s ago.)

News of Pagliuca’s interest was first reported by the Globe’s website, which also identified advertising executive Jack Connors and former Globe executive Stephen Taylor as likely suitors (word is that Taylor’s interest and ability to actually buy the paper are overstated).

Our sources indicate that all of this is still in the early stages, and that fully-formed groups do not yet exist. It’s unclear if Pagliuca or the others have yet had conversations with the Boston Newspaper Guild, a union that represents Globe employees.

There is some precedent for Pagliuca making a big personal investment that isn’t primarily designed for return-on-investment. Back in 2002, he and local venture capitalist Wyc Grousbeck led a $360 million purchase of The Boston Celtics. The pair — and their slew of minority limited partners — certainly wanted to return the team to financial glory, but never indicated plans to take the company public and cash out. Instead, the! y viewed the deal’s success or failure through the prism of the Boston Garden’s rafters, which today is one banner more crowded than when they began.

It’s also worth noting that, through Bain Capital, Pagliuca also holds a piece of Dunkin’ Donuts. If you’re not from Boston, just understand that Dunkin’ has become as much of a local institution as the Celtics or the Globe. And if Pagliuca has his way, he might just own all three.

*** Tonight’s peHUB Shindig in Chicago is sold out. Amazing response by our Windy City readers, given that we only announced the event last Monday.

Tickets will not be available at the door, but you can email me if you’d like to get put on a waitlist. It’s possible that there will be some cancellations by existing ticket-holders and, if so, we might be able to add a few extra names.

Per usual, big thanks to tonight’s sponsors: Bank of Ireland and Crowe Horwath LLP. We couldn’t do it without you…

*** iWidgets, a San Francisco-based company that automates the process of embedding native applications into social networking sites, today announced that it has changed its name to Transpond. The reason? Because its VC backers — led by Opus Capital — believe that the word “widget” is now seen “as a has-been technology.”

*** Mike Arrington wrote yesterday that Twitter has become the third-largest source of traffic to TechCrunch, following Google and direct visits. Figured I should chime in to say the same is true for us at peHUB. Really surprising. You can follow our Twitter feed at www.twitter.com/pehub, which also seems to double as my personal Twitter account.

*** I’m here in Chicago for the next few days, and tomorrow will be pulling double-duty at the Buyouts Chicago conference. F! irst, I’ll be interviewing Jay Jordan of The Jordan Cos. Then I’ll be moderating a panel on current leveraged financing strategies. Pass on any questions you think I should ask…

Top Three

Golden Gate Capital and Infor have agreed to buy SoftBrands Inc. (AMEX: SBN), a Minneapolis-based provider of enterprise software to the manufacturing and hospitality markets. The deal is valued at approximately $80 million, or $0.92 per share (100% premium to Friday’s closing price).Wells Fargo Foothill, an existing SoftBrands lender, has agreed to provide leveraged financing.

Capella Inc., a Galway, Ireland-based developer of medical devices to treat bifurcation vascular disease, has raised $17.3 million in Series C funding. Fountain Healthcare Partners and Mitsui & Co. co-led the round, and were joined by Enterprise Iteland and return backers Polytechnos Partners and ACT Venture Capital.

MagnaChip Semiconductor LLC, a South Korean maker of analog and mixed-signal semiconductor products for high-volume consumer applications, has filed for Chapter 11 bankruptcy protection. It also said that KTB Securities would lead an acquisition of the company’s operating and sales affiliates. The company withdrew a $575 million IPO registration earlier this year. It was formed in 2004, via the $828.2 million carve-out of Hynix Semiconductor’s non-memory semiconductor operations, by Citigroup Venture Capital, CVC Asia Pacific and Francisco Partners.

VC Deals

Interlace Medical Inc., a Framingham, Mass.-based developer of medical devices for the in-office polypectomy/myomectomy market, has raised $20.5 million in Series C funding. Baird Venture Partners and HLM Venture Partners co-led the round, and were joined by Hambrecht & Quist Capital Management, Aperture Venture Partners and return backers New Leaf Venture Partners and Spray Venture Partners.

SS8, a Milpitas, Calif.-based, has raised $13 million in new VC funding. Ret! urn backers include W Capital Partners, Kleiner Perkins Caufield and Byers, Onset Ventures, Protostar Partners and Woodside Fund.

Anulex Technologies Inc., a Minnetonka, Minn.-based maker of medical devices for spinal disk preservation and anular repair, has announced that it has raised $10.2 million in fourth-round funding. peHUB first reported the news last month. Backers include Affinity Capital, Delphi Ventures, MB Venture Partners, New Enterprise Associates, SightLine Partners and Split Rock Partners. The company previously raised $34 million, plus a $7 million “growth capital term loan” from Silicon Valley Bank.

Buyout Deals

Birch Hill Equity Partners and Westerkirk Capital have co-sponsored a recapitalization of Shred-it International Inc., and Ontario-based provider of on-site document destruction services and records retention information management. No financial terms were disclosed. National Bank of Canada and Toronto Dominion Bank co-led the senior debt financing, while Imperial Capital ran the process on behalf of Shred-It.

Carl Icahn is considering a new bid for bankrupt auto parts maker Delphi Corp., according to The New York Post. Delphi recently agreed to sell most of its assets to Platinum Equity, but a judge ordered the company to open up the process to other potential bidders. Competing offers must be made by July 10.

KKR has completed a series of investments in Ma Anshan Modern Farming Co. Ltd., a dairy based in the Chinese province of Anhui. No financial terms were disclosed, although Reuters reported in December that KKR planned to invest around $100 million, while other investors could add another $150 million.

Patheon Inc., a contract drug maker that is being targeted for an unsolicited takeover bid from JLL Partners, reported a $3.2 million loss in the quarter ending April 30. This compares to an $8 million loss over the same period last year.

WL Ross & Co. has supplied a $75 million term loan to railway equipment provider Greenbrier Cos Inc. (NYSE: GBX).

PE Exits

Misonix Inc. (Nasdaq: MSON) has acquired three patents associated with high intensity focused ultrasound from ProRhythm Inc. No financial terms were disclosed. ProRhythm shareholders include L Capital Partners and St. Jude Medical Inc.

PE Exits

NDS Surgical Imaging LLC, a portfolio company of Riverside Partners, has acquired Tzero Technologies, a Sunnyvale, Calif.-based provider of ultra-wideband technology and wireless video products, according to VentureWire. The move reportedly came after Tzero failed to secure new funding. It had raised around $60 million in VC funding from firms like August Capital, CID Group, Lightspeed Venture Partners, OVP, U.S. Venture Partners and VentureTech Alliance. Its most recent round was a $17 million Series C infusion in early 2007. www.tzerotech.com

Firms & Funds

The Association for Corporate Growth (ACG) has formed a chapter in China, based in Tianjin.

KKR Financial Holdings (NYSE: KFN) said in a regulatory filing that a debt-holder has swapped $3 million of convertible notes for 1.18 million shares.

Human Resources

Ron Yara has stepped down as a general partner with Tallwood Venture Capital, according to VentureWire. He had come out of retirement in 2002 to join Tallwood when it was raising its first institutional fund, and left at the end of April, when his portfolio company Axiom Microdevices was sold to Skyworks Solutions. His remaining board seats – Pixim, Silicon Clocks and Ozmo Devices – will be reallocated to other partners at Tallwood, which does not expect to hire a replacement. www.tallwoodvc.com

Laurence Grafstein, a former co-head of Lazard’s technology and media group, has agreed to join Rothschild as co-head of U.S. M&A, according to the Wall Street Journal.

Seamus Moorhead and Charles Gournay have joined Greenhill & Co. as London-based managing directors focused on the consumer and retail sectors. They previously were managing directors for UBS’ consumer and retail investment banking group.

Alex Taussig has joined Highland Capital Partners as a senior associate. He will work out of the firm’s Lexington, Mass. office, and focus on cleantec! h investments. He previously was a research and teaching assistant in MIT’s Magnetic Materials & Devices Group. www.hcp.com