peHUB Wire: Thursday, August 27, 2009

There was a time, not too long ago, when readers railed against any mention of politics or government in this space. “They have nothing to do with investing,” was the common gripe (often followed by something about how I was to the left of Castro). Such complaints have since disappeared, of course, since government has become the equal third leg of a stool that once was tilted toward buyers and sellers.

Nowhere is that more true than in the burgeoning cleantech space, where issues of government funding and regulation often are central to a startup’s business strategy.

With that in mind, I’m pleased to announce the first-ever peHUB event to include actual content (don’t worry, there will still be plenty of time for boozing and schmoozing).

Cleantech & Washington: Making Sense of it All

The event takes place on the evening of October 27, in the downtown Boston offices of law firm Bingham McCutcheon. We’ll begin with some late afternoon cocktails, followed by a panel discussion that will include:

• David Brown: Partner & General Counsel, C Change Investments

• Nick d’Arbeloff: Executive Director, New England Clean Energy Council

• Pat Cloney: Executive Director, Massachusetts Clean Energy Center

• Rob Day: Partner, Black Coral Capital

• Scott DePasquale: Principal & Executive-in-Residence, Braemar Energy Ventures

• Barry Direnfeld: Partner, Bingham & McCutcheon

Yours truly will do the moderating duties. Following the panel, you’ll have plenty more time to network with local cleantech entrepreneurs, venture capitalists, attorneys and assorted hangers-on.

Tickets are just $75 if you get yours before September 12. Please go here to register, or email me with any questions.

*** Speaking of government intervention, the FDIC yesterday approved new rules for private equity investments in banks, by a 4-1 vote. As expected, the new regs are much looser than what was originally proposed in early June, but much stricter than what is currently in place.

The main points are as follows:

• Capital Requirements: The FDIC will enact a Tier 1 leverage ratio of 10% for the first three years of ownership. This is lower than the original 15% proposal, but higher than what non-PE-backed banks (5%) or de novo banks (8%) are required to hold.

• Source of Strength: Removed entirely. Original proposal basically said that a PE firm would be liable for a bank’s losses.

• Cross-guarantees: Only will apply to PE firm that owns 80% or more of a bank. Original proposal was for all owners of 5% or more, and would have required a firm with multiple banks to use a stronger one to help support a weaker one.

• Continuity of ownership: PE owners will be precluded from selling any of their securities for a three-year period. This is unchanged from the original proposal. Also mostly unchanged are certain disclosure and transparency requirements.

• All of these rules are effective immediately, but are not retroactive for already-agreed upon deals.

• All of these rules are subject to review in six months

Initial PE industry reaction so far has been lukewarm (at best) and hostile (at worst).

My quick take is that FDIC has reached a reasonable compromise, even if I would have written the final rules a bit differently (used de novo level for cap, put an ownership continuity exception, retained partial source of strength via an escrow account). Also disagree with dissenting FDIC board member who said PE-specific rules shouldn’t exist in the first place.

I plan to get more in-depth later today at peHUB and in this space tomorrow… In the meantime, I’m very interested in your thoughts. Please send them over, if you’ve got ’em.

Top Three

CVC Capital Partners has led an offer to acquire National Express (LSE: NEX), Britain’s debt-laden bus and rail operator. The bid is worth approximately £600 million, and also includes Spain’s Cosmen family, which is National Express’ main shareholder with an 18.6% stake.

Balihoo Inc., a Boise, Idaho-based provider of local online marketing automation for franchises and national brands, has raised $7.05 million in third-round funding.OpenView Venture Partners led the round, and was joined by return backers Highway 12 Ventures and Lacuna Gap Capital. Balihoo previously raised around $5.5 million.

Aran Ron has joined Bessemer Venture Partners as a New York-based operating partner focused on healthcare. He previously was president and COO of Group Health Inc., a PPO and HMO plan.

VC Deals

eBuilder, a Stockholm, Sweden-based provider of SaaS for business process integration, has raised SEK 40 million($5.62m) in VC funding from Eqvitec Partners and Industrifonden.

Inspired Technologies Inc., a North Huntingdon, Penn.-based developer of personal oxygen systems,has raised $5.54 million in new Series B, according to a regulatory filing. The company previously raised around $11 million, from firms like Birchmere Ventures, Cardinal Partners, Draper Triangle Ventures and Innovation Ventures.

Microvi Biotech Inc., a Union City, Calif.-based developer of clean and waste-free water treatment technologies, hassecured $1 million of a $1.25 million Series A round. Individual backers include Perry Solomon, a Microvi board member and executive-in-residence with Battery Ventures.

RightsFlow, a New York-based music-licensing and royalty payment technology platform, has raised $1.5 million in Series A funding from Originate Ventures.

Appear TV, a Norway-based provider of broadcast and IP television equipment, has raised an undisclosed amount of VC funding from Creandum.

Update: Yesterday we reported that ! Tremor Media, a New York-based online video advertising network, had raised an undisclosed amount of strategic funding from SAP Ventures. A regulatory filing indicates that the investment was approximately $2 million.

Buyouts Deals

Ancor Capital Partners has acquired Spencer N. Enterprises Inc., an El Monte, Calif.-based maker of soft home decor products. No financial terms were disclosed.

Ernst & Young, Grant Thornton and law firm Mayer Brown had a lawsuit against them dismissed, related to their roles on the collapse of futures and commodities broker Refco. A U.S. district judge said that a trustee representing former Refco customers failed to prove that the accused knew of or substantially assisted in the fraud that led to Refco’s demise.

PE Exits

The Riverside Co. has sold off its remaining stake in AIS, a Linz, Austria-based provider of IT solutions for thesteel industry, to PSI AG. No financial terms were disclosed.

Firms & Funds

Helix Ventures has formed as a Palo Alto, Calif.-based VC firm focused on healthcare technologies. Its principals are former Asset Management Co. investors Graham Crooke and Evgeny Zaytsev, plus Fusion Medical Technologies co-founder Philip Sawyer. According to VentureWire, the firm is targeting $150 million for its debut fund.

Human Resources

Pierre-Yves Bareau has joined JP Morgan Asset Management as head of emerging markets debt, according to Dow Jones. He previously was CIO for emerging markets debt with Fortis Investments.

Finnish Industry Investment has promoted Anne Riekki to investment director. She joined the group in early 2007.