peHUB Wire: Monday, May 3, 2010

A few quick notes to kick off your Monday, as I prepare for a morning of reading resumes for Erin’s (soon to be) vacated peHUB position. My goal is to channel co-founder Paul English, who told the Nantucket Conference on Friday that he challenges himself to identify and hire talented people within seven days. Seems like a great plan. Then again, so does Inbox Zero (mine is currently at 4,925)…

*** Answer Key: On Friday I asked you to name the co-founder of a mid/large-market private equity firm who just announced that he was moving onto other pastures?

The answer is Jesse Rogers of Golden Gate Capital.

The entire firm was notified early last week, with LPs getting word a day or two later. Neither Golden Gate nor Rogers are commenting publicly, but sources tell me that this is being viewed as a retirement. Rogers is listed ! as a key-man on Golden Gate’s $5.5 billion third fund, but the clause is only triggered if two key-men were to leave. I posted a bit more info here.

*** Speaking of personnel departures, here’s two more scoopy ones for you: Graham Paterson is stepping down as chief operating officer of SL Capital Partners, in order to “find a career that will allow him to have a more flexible working life.” Also, Fraser van Rensburg has left place agent MVision, where he had been a UK-based partner. No word on his future plans.

*** Less scoopy (because there’s a website): Alan Austin has formed a Greenville, S.C.-based mid-market I-bank called Mt. Vista Capital. He spent the past nine years as a principal with mid-market M&A advisory The Capital Corp.

*** OpenTable for Takeout? That’s the new plan for Exit41, an Andover, Mass.-base! d company that has quietly raised $6 million in VC recap funding. Expe ct a formal announcement later this week.

New investors include GrandBanks Capital, Contour Venture Partners and Dace Ventures, while existing shareholder Fidelity Investments also participated (others, like Thomas Weisel Venture Partners, did not). The company was launched in 1998 as Elm Square Technologies, as point-of-sale enterprise software for restaurants and caterers to manage orders. It later changed its name to Exit41, and began supplying fast-food chains with technology that better enabled drive-thru ordering systems.

The new recap round follows more than $20 million in prior VC investment, and also reflects yet another strategic change. Exit41 now is trying to scale a platform on which customers can electronically order take-out meals. Again, OpenTable for takeout. You can read a bit more here…

*** Yes, the home office has potable water. First time in ! a long time I’m glad to be this far west of Boston… I think I speak for Hobo as well.

*** BusinessWeek recently published a list-icle on the top 10 cities for startups. Metrics included “number of startups, quality of the workforce, and resources like universities and venture capital.”

Those metrics sound good, but isn’t there a sniff test when Franklin, Tenn. comes out ahead of San Francisco? Or when Boca Raton beats Cambridge, Mass? Or when New York City doesn’t even make the list? There’s a difference between being contrarian and being absurd…

Top Three

Oak Hill Capital Partners has agreed to buy arcade-themed restaurant chain Dave & Buster’s for $570 million from Wellspring Capital Management. Wellspring had taken the company private in 2006 for $257 million, plus debt.

LaSalle Capital Group and Expedition Capital Partners have partnered to acquire three security guard services businesses: Industrial Security Services Inc. (Cleveland), Leonard Security Services ( Virginia Beach) and Eagle Security Inc. (Portsmouth, Va). The three companies will be rolled into a new buy-and-build platform called United American Security, which will be run by former Employer’s Security Co. CEO Steve Frost . No financial terms were disclosed.

Ellie Mae Inc., a Pleasanton, Calif.-based electronic mortgage origination network, has filed for an $86.25 million IPO. It plans to trade on the NYSE under ticker symbol ELLI, with Goldman Sachs serving as lead underwriter. The company reports $37 million in 2009 revenue, up from $33 million in 2008. Net income was $1.66 million, up from negative $1 million in 2008. Shareholders include Charter Ventures (15.6% pre-IPO stake), Alta Partners (12.18%) and Alloy Ventures (8.6%).

VC Deals

AppDynamics Inc., a San Francisco-based provider of application performance management solutions, has raised $11 million in Series B funding. Return backers Greylock Partners and Lightspeed Venture Partners co-led the round.

InTouch Technologies, a Santa Barbara, Calif.-based provider of remote presence telemedicine solutions, has raised $10 million in new VC funding. Beringea led the round, and was joined by return backers Galen Partners, In! vestCare Partners and Twenty One East Victoria.

Nualight Ltd., a Cork, Ireland-based maker of LED lighting solutions for retailers, has raised €9.1 million in VC funding. Climate Change Capital Private Equity led the round, and was joined by 4th Level Ventures and return backer ESB novusmodus (affiliate of the Irish State electricity company).

High Street Partners, an Annapolis, Md.-based provider of international bus! iness services, has raised $6 million in Series B funding. Sigma Partners led the round, and was joined by Baird Venture Partners and return backer SVB Financial Group.

Sigma Offshore, a UK-based developer of a mooring and fluid transfer system for oil and gas production vessels, has raised £4 million in VC funding. Backers include National Oilwell Varco, Scottish Enterpprise and Energy Ventures.

Alphabet Energy Inc., a Berkeley, Calif.-based developer of inexpensive waste heat recovery technology, has raised $1 million in seed funding from Claremont Creek Ventures and the CalCEF Clean Energy Angel Fund.

Cloud Sherpas, an Atlanta-ba! sed provider of Google Apps solutions, has raised $1 million in VC funding led by new CEO Jon Hallett, former executive chairman at Northridge Systems.

Buyouts Deals

First Reserve Corp. has committed up to $500 million in equity for Barra Energia Petroleo e Gas, a new Brazilian energy exploration and production company.

Golden Gate Capital and Kenner & Co. have completed their previously-announced recapitalization of Atrium Companies Inc., a maker of vinyl and aluminum windows and patio doors. Atrium h! ad filed for Chapter 11 bankruptcy in January. The recap cuts its pre-bankruptcy debt by more than 60%, with existing owners Golden Gate and Kenner investing more than $170 million in equity capital. The firms originally announced plans to invest $125 million.

Lyondell Chemical Co. has exited bankruptcy after a 16-month process. Shareholders now include Apollo Management and Ares Management.

Warburg Pincus and Silver Lake Partners are nearing a deal to buy financial information services company Interactive Data Corp. (NYSE: IDC) for about $3.1 billion, accor! ding to Reuters. The seller is Pearson PLC. Other bidders included KKR with CVC Capital Partners, and Bain Capital with Advent International.

THL Partners has agreed to increase its proposed investment in Sterling Financial Corp. (Nasdaq: STSA) from $134.7 million to $175 million.

WL Ross & Co. and railroad equipment supplier Greenbriar Cos. (NYSE: GBX) have jointly acquired a lease portfolio of nearly 4,000 railcars for around $230 million.

PE-Backed IPOs

Gordman’s Stores Inc., an Omaha, Neb.-basedoff-price department store chain, has filedfor a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol GMAN, with Piper Jaffray serving as lead underwriter. The company reports $457 million in revenue for the year ending January 30, 2009. Net income for the period was over $15 million. Sun Capital Partners acquired Gordman’s in September

PE-Backed M&A

BMG Rights Management, the joint music venture from KKR and Bertelsmann, is eyeing a number of UK investment projects, according to the FT.

PE Exits

Arsenal Capital Partners has completed its previously-announced sale of Genovique Specialties Corp., a Rosemont, Ill.-based provider of benzoate plasticizers, to Eastman Chemical Co. (NYSE: EMN). No financial terms were disclosed.

Warburg Pincus has agreed to sell LifeCore Biomedical Inc., a Chaska, Minn.-based maker! hyaluronan-based biomaterials for the medical and veterinary markets, to Landec Corp. (Nasdaq:LNDC). The deal is valued at up to $54 million, including $40 million in cash, $4 million in assumed debt and up to $10 million in earn-outs. Warburg Pincus took LifeCore private in 2008 for approximately $239 million. It then split the company into two pieces, with the dental division being merged into an existing portfolio company and the hyaluronan remaining as Lifecore. Read more…

Firms & Funds

Avalon Ventures is targeting $150 million for its ninth fund, according to VentureWire.

Draper Fisher Jurvetson is nearing a $400 million final close on its tenth fund, according to VentureWire.

K9 Ventures, a microfund launched by serial entrepreneur Manu Kumar, has closed its debut vehicle.

Globespan Capital Partners is beginning to pre-market its sixth fund, according to PE Week. Expect the target to be lower than the $400 million raised for Fund V.

Montagu Newhall Associates has changed its name to Greenspring Associates. The Owings Mills, Md.-based firm manages venture capital funds-of-funds and makes direct co-investments.

Human Resources

Steve Price has been named chairman and CEO of Townsquare Media (fka Regent Communications), a radio station operator majority-owned by Oak Hill Capital Partners. Price is the co-founder of media investment firm FiveWire Ventures, and previously was a managing director with both Centerbridge Partners and S! pectrum Equity Investors.

Robert Chiste has joined El Dorado Ventures as an executive-in-residence, with a focus on the cleantech space. He is the former chairman, president and CEO of Comverge (Nasdaq: COMV), a provider of energy efficiency and demand management solutions for the utility, commercial and industrial markets.

Lee Hower has transitioned into a venture partner role wit! h Point Judith Capital, where he had spent the past f ive years as a principal. He wrote on his blog that he plans to do more angel investing, and also is involved in a stealth-stage startup.

Citigroup has named Sunil Nair as head of its India private equity business. He will continue to manage Citi’s international VC activities in Central and Eastern Europe and the MENA region.

Stewart Cohen has agreed to join Gordon Brothers as chief operating officer, effective May 10. He previously was executive vice president of special assets at Textron Financial.