peHUB Wire: Thursday, February 25, 2010

Did you catch some of yesterday’s newspaper headlines:

* NY Times: “A $3.5 billion effort aims to help tech startups”

* SF Chronicle: “Alliance to boost startups, hire more grads”

* WSJ: “Intel, Venture-Capital Firms To Make $3.5B In US Investments”

What a bunch of ado about nothing.

Tuesday’s announcement that Intel Capital and 24 venture capital firms would invest billions into U.S. startups is akin to me announcing that I’m going to write about private equity. It’s what they do. The only “news” here is that Intel managed to sucker so many news organizations into giving them accolades.

Intel Capital was the single busiest venture capital firm of the past decade, investing in 463 U.S.-based companies over 722 financing rounds. Also in that top ten were four other firms named in the Intel release: New Enterprise Associates, Draper Fisher Jurvetson, Kleiner Perkins ! and Venrock.

I spoke with reps from some of the listed firms, and each said that the announcement in no way reflected a planned change in investment strategy or investment pace. They also are under no obligations — nor even expectations — to increase their co-investment activity with Intel Capital. In other words, business as usual.

Had Intel Capital announced that it and the 24 firms were not planning to invest $3.5 billion over the next two years, then that would have been a story. This was just an effective PR gimmick.

*** Big Stack: For the past several years, the VC in the Rockies conference has concluded with a poker tournament for attendees. And, for the past several years, I have dutifully reported on the victor.

Today, I’m excited – and exhausted – to report that the winner was your humble correspondent. After nearly three hours of play, I dispatched Ron Singh of SVB, who in turn had knocked out Chris Onan of Appian Ventures (adorned in a Boise State t-shirt, given to him earlier in the day by Mark Solon of Highway 12 Ventures). Now I can retire…

*** Publishing Note: I’m (hoping) to fly back East tomorrow, so Erin will handle Wire duties. Please send her any news of note:

Top Three

The Blackstone Group (NYSE: BX) reported $329 million in economic net income last quarter, compared to a $764 million loss a year earlier. Its after-tax ENI was 29 cents per share, beating analyst expectations of 20 cents per share.

Silicon Graphics (Nasdaq: SGI) has acquired the assets of Copan Systems, a Longmont, Colo.-based provider of persistent data storage solutions. No financial terms were disclosed. Copan had raised over $105 million from Austin Ventures, Battery Ventures, Globespan Capital Partners, FirstMark Capital, Westbury Partners and Credit Suisse.

Cephalon Inc. (Nasdaq: CEPH) has exercised an opti! on to acquire Ception Therapeutics Inc., a Malvern, Pa.-based drug company whose lead candidates are anti-inflammatories. The deal was originally signed in early 2008, with Cephalon making a $100 million upfront payment, and agreeing to pay another $250 million if it chose to exercise the acquisition option. Ception has raised around $88 million in VC funding, from firms like Essex Woodlands Health Ventures, Investor Growth Capital, MDS Life Sciences, New Science Ventures and Aperture Venture Partners.

VC Deals

Newport Media Inc., a Lake Forrest, Calif.-based fabless semiconductor company supplying products to the mobile broadcast media market, has raised $15 million in Series D funding. Pinnacle Ventures led the round, and was joined by return backers Benchmark Capital, Venrock, Global Catalyst Partners, Oak Investment Partners and DAG Ventures. The company previously raised more than $66 million in venture capital since its 2005 inception.

HyTrust, a Mountain View, Calif.-based provider of policy management and access control for virtual infrastructure, has raised $10.5 million in Series B funding. Cisco Systems and Granite Ventures were joined by return backers Trident Capital and Epic Ventures.

Mashery, a San Francisco-based provider of API enablement and management services, has raised $5.5 million in Series A funding. Cisco Systems led the round, and was joined by return backers Formative Ventures, First Round Capital and .406 Ventures.

Mi-Pay, a UK-based provider of mobile payment processing solutions, has raised £3 million in new VC fundin! g. Octopus Ventures led the round, and was joined by return backer Albion Ventures.

DubMeNow, a Vienna, Va.-based developer of an application for exchanging contact information, has raised $2.8 million in new VC funding. Syncom Ventures led the round, and was joined by individual angels. TechCrunch first reported the news.

Smilebox Inc., a Redmond, Wash.-based provider of multimedia expressions technology, has raised $2 million in new VC funding from return backersBessemer Venture Partners and Frazier Technology Ventures.

Yoyi Media, a China-based provider of online advertising and marketing solutions, has raised an undisclosed amount of Series A funding co-led by Gobi Partners and Steamboat Ventures.

Buyouts Deals

British Seafood, a UK fish importer and distributor partially owned by 3i Group, has gone into administration.

Blackhawk Specialty Tools LLC, a Houma, La.-based maker of automated top drive cement heads for the deepwater offshore oil and gas industry, has raised an undisclosed amount of equity funding from Rock Hill Capital Group.

Goldman Sachs has made an undisclosed minority investment in Tora Holdings, a provider of trading technology and financial services based in Asia. FT Partners served as exclusive strategic and financial advisor to the company.

KCB Management has acquired Integrated Systems Improvement Services (ISIS), a Sierra Vista, Ariz.-based provider of specialty services to federal agencies, prime contractors and corporations. No financial terms were disclosed.

PE-Backed IPOs

Anthera Pharmaceuticals Inc., a San Mateo, Calif.-based developer of anti-inflammatory drugs, has postponed an IPO that had been set for yesterday. No word yet on when, or if, the company will price the offering, which is designed to raise upwards of $69 million. Anthera has raised around $75 million in VC funding, from firms like VantagePoint Venture Partners (32.97% pre-IPO stake), Sofinnova Ventures (21.24%), Caxton Advantage Life Sciences Fund (6.09%), HBM BioCapital (6.07%), Pappas Ventures (5.55%) and Mitsubishi International Corp.

Brenntag, a German chemicals distributor acquired by BC Partners in 2006, is planning to go public in the first half of this year, according to Reuters. .

Tengion Inc., an East Norriton, Penn.-based regenerative medicine company focused on replacement organs like bladders, has raised the target for its IPO from $40.25 million to $46 million. It also has added Leerink Swann as a co-lead underwriter, alongside Piper Jaffray. Tengion has raised over $140 million in VC funding, from Oak Investment Partners (19.6% pre-IPO stake), HealthCap (14.3%) Johnson & Johnson Development Corp. (12.5%), Brookside Capital (8.6%), Bain Capital Ventures (8.5%), Quaker BioVentures (8.3%), L Capital Partners (6.4%), Deerfield Partners and Safeguard Scientifics.

Trius Therapeutics Inc., a San Diego-based developer of antibacterial drugs, has set its IPO terms to six million common shares being offered at between $12 and $14 per share. The company would have an initial market cap of approximately $233 million, were it to price at the high end of its offering range. ! Trius plans to trade on the Nasdaq under ticker symbol TSRX, with Cred it Suisse serving as lead underwriter. The company has raised nearly $50 million in VC funding, from firms like Sofinnova Ventures (21.2% pre-IPO stake), Interwest Partners (17.7%), Versant Ventures (17.7%), Prism VentureWorks (13.5)%, Kleiner Perkins Caufield & Byers (11.9%) and FinTech Global Capital.

PE-Backed M&A

hi5 Networks Inc., a San Francisco-based social networking site with strong international presence, has acquired Austin, Texas-based social gaming company Big Six. No financial terms were disclosed. Hi5 raised a $20 million Series A round led by Mohr, Davidow Ventures in 2008.

Genband, a Plano, Texas-based provider of IP infrastructure solutions, has agreed to buy most of the assets of Nortel Networks’ carrier VoIP and applications solutions businesses, for approximately $282 million. Genband is being backed on the deal by existing shareholder One Equity! Partners. Genband had originally been named stalking horse bidder for the assets, and no other suitor emerged.

Millennial Media, a Baltimore-based provider of mobile advertising solutions, has acquired San Francisco-based mobile analytics firm TapMetrics. No financial terms were disclosed. Millennial Media has raised around $37 million over three rounds of VC funding, from Bessemer Venture Partners, Columbia Capital, Charles River Ventures and New Enterprise Associates.

PocketGear Inc., a Durham, N.C.-based mobile app store and content marketplace, has acquired Handango, a Hurst, Texas-based provider of smartphone content. No! financial terms were disclosed. Handango had raised around $80 millio n in VC funding since 1999, from Institutional Venture Partners, Advanced Technology Ventures, Centerpoint, Neo Carta Ventures, Pharos Capital Group and SSM Partners. PocketGearraised an undisclosed amount of VC funding from Noro-Moseley Partners and Wakefield Group, as part of its spinout from Motricity.

PE Exits

Revive Personal Products Co. has acquired The Natural Dentist, a Medford, Mass.-based oral care company. No financial terms were disclosed. Natural Dentist has raised over $25 million in VC funding from Burrill & Co., Prolog Ventures, Brooke Private Equity and Great Spirit Ventures. It was advised on the sale by Imperial Capital.

Firms & Fund

Code Advisors has launched as a boutique investment bank focused on “the intersection of media and technology.” Its principals are Quincy Smith (former CEO of CBS Interactive), Fred Davis (co-founder of Davis Shapiro Lewit & Hayes) and Mike Marquez (former head of biz dev for CBS Interactive). Advisory board members include David Golden of Revolution LLCand Danny Rimer of Index Ventures.

Fortress Investment Group (NYSE: FIG) reported an $84 million net loss last quarter, compared to a $140 million net loss one year earlier.

KKR reported economic net income of $515.3 million for last quarter, compared to $822.7 million for the same period a year earlier. It ! also said it is moving forward with plans to list on the NYSE, and that it will pay an 8 cent shareholder dividend.

Frank Yu, a former managing director with Och-Ziff Capital Management, is planning to raise up to $500 million for a China-focused private equity fund, according to The Wall Street Journal. It will be called Themes Investment Partners.

The Blackstone Group has been sued by an administrative assistant, over the firm’s overtime payment policies.

Human Resource

Paul Ahlstrom has left vSpring Capital, a Salt Lake City-based venture capital firm he co-founded, according to VentureWire. He plans to launch a new firm n Mexico. vSpring will not add a new managing director to replace him on its $162 million third fund.

Adam Clemens and Greg Garrett have joined Portfolio Advisors as managing directors. Clemens previously was co-founder and president of New York Life Capital Partners, while Garrett was a partner with Adams Street Partners.

Brian Barnum has joined Mayfield Fund as an entrepreneur-in-residence. He is the former president of RH Donnelley Interactive.

Olivier Schuepbach has left European venture capital firm Wellington Partners, in order to become director of international and corporate development for German online private shopping club Brands4friends. He had joined Wellington in 2006, and served as a principal. Brands4friends has raised VC funding from Partech International, Mangrove Capital Partners and Holtzbrinck Ventures.

Ben Terk has stepped down as a partner with Rho Ventures, in order to launch a new firm focused on small-cap public equities, according to VentureWire. Terk Capital will have offices in Los Angeles and New York. Terk joined Rho Ventures in 1998 from Morgan Stanley, and served on the boards of Rho portfolio companies Alien Technology! , Gearworks, PHT and Solicore.

Jeffrey Schottler has joined Denver-based I-bank Headwaters MB as a managing director. He previously spent the past four years with Clearcreek Partners.

Loretta Lau has joined law firm Goodwin Procter as a Hong Kong-based corporate finance partner. She previously was with Mayer Brown.

Jeff Roberts has joined Gibson, Dunn & Crutcher LLP as a London-based partner, with a focus on international M&A, private equity and equity capital markets. He previously was with Freshfields Bruckhaus Deringer.