peHUB Wire: Monday, September 21, 2009

The sun is shining, the beloved Patriots are sputtering and I’m very disappointed to have not interviewed Barrack Obama yesterday. In other words, it’s time for some Monday Mouth-Off.

Leading us off are some responses to Friday’s column about Andrew Cuomo’s behavior in the pay-to-play investigation:

Rodney: “I read your piece today and only had one thing to ask: Are you so naïve? Isn’t extortion one of the government’s only weapons?”

I actually got a bunch of emails like this, so let me briefly respond: No, I’m not naïve. Cuomo’s actions in this case haven’t surprised me, nor did I expect that they’d surprise most readers. But it’s our collective acceptance of this outrageous status quo that caused me to write it. Sometimes the obvious needs to be pointed out…

Tony: “Cuomo is simply doing what Spitzer did, because he wants to become governor like Spitzer did.”

Stan: “It m! ay be true that the PE firms aren’t admitting wrongdoing, but their willingness to pay speaks volumes. If they were truly innocent, they’d stand up to Cuomo’s pressure and fight.”

JM: “I agree with you. Just more political behind the scenes dealing. The scapegoats in all this mess are the legitimate placement agents. Get rid of us, and of course, everything will be fine. How does that work? We were not involved in the pay to play scandal, but if they get rid of us, there won’t be any more pay to play scandals? I guess it’s easier than getting rid of crooked politicians.”

*** Next up was last Tuesday’s column, on non-compete agreements.

Bob begins: “Non-compete agreements are a very tricky business – but I think all employers (not just PE or VC firms) should be required (by law if necessary) to forfeit any rights under a non-compete in the case of termination without cause – even if the employee receives post-termination residual earnings.! If you are cut loose through no fault of your own – then all bets are off. Every company needs to re-think the employer/employee relationship – people (not proprietary business processes) truly differentiate one company from another.”

Garth: “Totally agree that Sun’s enforcement of its non-competes is a little draconian, but it begs the question: Why did the employees sign such a restrictive non-compete in the first place?”

Brian: “It goes back to the fact that those who are not talented and fearful put these agreements in place to protect themselves from people who are driven and smarter from getting ahead. If you are competitive and are the best at what you do, you never fear someone leaving or lessen their ability to add value by strapping them to the wall with an agreement.”

*** Finally, Julie asks: “Will you be doing a peHUB Shindig in Los Angeles before Buyouts West, like you’re doing in Dallas before Buyouts! Texas?”

Hadn’t actually thought about it Julie, because I wasn’t officially going to Buyouts West until last week. But yes, let’s have a shindig in LA. To do so, of course, I need some sponsors. Email me if you’re interested. The date would be November 18.


*** Plug #1: More than 120 tickets have already been sold for our Dallas Shindig, which takes place on October 14. Sponsors are Landmark Partners, New Capital Partners and StaffOne. Get your ticket today.

*** Plug #2: Agenda and registration info for our Boston cleantech evening, taking place on October 27 at Bingham McCutchen. Topic is making sense of Washington’s cleantech funding and regulatory environment.

Top Three

MooBella Inc., a Taunton, Mass.-based developer of a technology that lets users make hard-scoop ice cream in 40 seconds, has raised $18 million in Series A funding from an affiliate of Inventages. The funding will be used to support the company’s initial product rollout, with 100 commercial machines.

Aurora Capital Group has agreed to acquire Porex from HLTH Corp. (Nasdaq: HLTH). The deal is valued at $142 million, including $74.5 million in cash payable at closing and $67.5 million in senior secured debt. Porex makes porous plastic products and components used in healthcare, industrial and consumer applications.

Whitney Rockley has joined Emerald Technology Ventures as a general partner. She previo! usly was a partner with Nomura New Energy & Clean Technology Ventures. Emerald also announced that it has promoted Charles Vasletto partner.

VC Deals

PrimeraDx Inc., a Mansfield, Mass.-based molecular diagnostics company, has raised $20 million in Series C funding. CHL Medical Partners led the round, and was joined by return backers Abingworth, InterWest Partners, Malaysian Technology Development Corporation, MPM Capital, Burrill & Co. and the Invus Group.

Ensequence Inc., a Portland, Ore.-based provider of interactive video software and services, has raised $20 million in fourth-round funding, according to VentureWire. The round was led by former CEO Clay Mathile. Ensequence previously raised over $58 million in VC funding, from firms like Westbury Partners and Fortuna Investments.

Nujira, a UK-based provider of RF transmission for cellular and broadcast networks, has raised £10 million in fourth-round VC funding. ! Environmental Technology Fund led the round, and was joined by return backers Bank Invest, 3i, Amadeus and Mitsubishi UFJ Capital.

eCommera, a UK-based provider of ecommerce services to the retail industry, has raised £5 million in second-round funding. Frog Capital led the deal, and was joined by return backer West Coast Capital.

GetOptics Ltd., a UK-based online provider of contact lens and eye care products, has raised £1.355 million from Octopus Ventures. The investment helps create GetOptics, via a merger of GetLenses and PostOptics.

Cell Medica Ltd., a UK ! developer of cell-based treatments for infectious disease and cancer, has raised £1.16 million from Imperial Innovations Group.

Buyouts Deals

The Carlyle Group has acquired a 17.3% stake in Chinese dairy Yashili. No financial terms were disclosed.

Goldman Sachs is in talks to buy around $250 million of convertible bonds and warrants in Geely Automotive, a Chinese carmaker.

TPG Capital has exited the auction to acquire a 49% stake in German academic publisher Springer Science and Business Media. Remaining bidders include EQT Partners and a joint offer from Carlyle Group and Providence Equity Partners. Sellers Cinven and Candover had been seeking €500 million, but initial bids fell short.

WorldLynx Wireless, a Toronto-based acquisition platform focused on Bell Mobility indep! endent wireless dealers across Canada, has raised an undisclosed amount of private equity funding from Mistral Equity Partners.

Arcandor, an insolvent German retailer, is in talks to sell its mail-order division.

PE Exits

The Blackstone Group has sold 38.1 million shares in Cineworld Group PLC (LSE: CINE) for around £69.2 million, which represented more than half its position. Blackstone now holds a 20% stake.

Montagu Private Equity has entered the second-round of its auction for portfolio company Survitec, a Belfast, Ireland-based maker of life jackets and life rafts. The company is expected to fetch around £300 million, with both strategic and financial buyers still in the running.

PE-Backed M&A

Wumart Stores, a Chinese retailer backed by TPG Capital, is in talks to acquire smaller rival Times Ltd. for approximately $600 million.

Firms & Funds

ARCH Venture Partners has opened an office in Boston, according to Xconomy. It is the firm’s fifth office, and is managed by associate Alex Rives.

The San Diego County Employees Retirement Association has hired Integrity Capital as the system’s outsourced CIO.

Human Resources

Steven Wallace has stepped down as head of Asia-Pacific M&A for Citigroup. No word yet on his future plans.