peHUB Wire: Thursday, July 30, 2009

Every time the peHUB Wire adds another thousand subscribers, I like to remind you that these morning missives are but grains of sand in our vast editorial hourglass. We’ve got more detailed news and views over at peHUB, plus in our print pubs: Buyouts, Venture Capital Journal, PE Week and European Venture Capital Journal.

peHUB search archive subscriptions can be purchased online for just $124. And I really encourage you to buy one today, as we’re just a few away from breaking our monthly record (it would show growth, which my corporate overlords apparently find quite important).

To subscribe to one of our print pubs, shoot an email over to Greg Winterton. Also, if you are interested in advertising on peHUB! Wire or peHUB.com, just reply to this email and let me know…

*** I did a Q&A yesterday with Charlie Eaton, the C.P. Eaton founder who is spearheading the placement agent lobbying organization. You can read the whole thing here, but three particularly interesting takeaways: (1) Some placement agents don’t want to be publicly identified as being part of the group, because they’re concerned that others in the group could be involved in shady dealings (i.e., guilt by unknown association); (2) Eaton says that 35% of his firm’s business over the past few years has been with public funds; and (3) This could be a short-term effort, designed only to deal with the current crises.

*** Sun Capital Partners got hit with a pair of resignations this week: David Blechman, a principal and the firm’s Ne! w York office, and Douglas Werking, a vice pre sident in its Florida shop. No word yet on either of their destinations. Blechman seems to be leaving immediately (he’s already off the website), while Werking will remain on through the end of August.

This leaves Sun with 45 senior investment and operational pros, and it’s planning to hire new junior staffers later this summer (get those resumes ready). One would think that it might first try to hire back some of the legions it laid off earlier this year, but that doesn’t really seem to be the plan (location issues, it appears).

The firm’s most recent deal was an add-on for PaperWorks Industries, which bought The Specialized Packaging Group.

*** Don’t be surprised to see Andrew Cuomo announce a deal with The Quadrangle Group before he announces one with Steve Rattner. The former is both more amenable and has a more defined precedent…

*** On Tap: Just got an email from an attorney, ! who says legislation passed Tuesday by the House Financial Services Committee “could potentially subject compensation structures within PE firms (and other private fund firms – hedge, VC, debt, etc.) to regulation. Will look into it once I hit send on the Wire, and will post at peHUB.

*** Apologies for the “read more” link troubles yesterday. If and when I mess up links in the future, you can always just go to peHUB and use the search feature.

*** Happy belated birthday ESC. We’ll have one of 10 Tables tonight…

Top Three

CVC Capital Partners reportedly has made the only bid for Anheuser-Busch InBev’s Central and European assets. TPG Capital had been expected to bid by Monday’s deadline, but did not.

Convey Computer Corp., a Richardson, Texas-based maker of applications to improve the performance of microprocessor servers, has raised $24.15 million in Series B funding. Braemar Energy Ventures was joined by return backers CenterPoint Ventures, Intel Capital, InterWest Partners, Rho Ventures and Xilinx.The company previously raised nearly $16 million.

ProtoStar Ltd., a Bermuda-based satellite services operator, has filed for bankruptcy protection. The company’s working capital lenders declared a default in April, and were so! oner followed by other secured lenders. ProtoStar was formed in 2005, and raised over $100 million in VC funding from firms like New Enterprise Associates, RedShift Ventures and VantagePoint Venture Partners.

VC Deals

Ibiquity Digital Corp., a Columbia, Md.-based developer of digital HD radio technology, has raised around $42.48 million in new VC funding, according to a regulatory filing. The company reports that half is in cash and half is an exchange offer of existing shares. Backers include ABC, Clear Channel, CBS Radio, Grotech Capital Group, JPMorgan Partners, New Venture Partners, FirstMark Capital, Ford Motor Co., Harris, Texas Instruments and Visteon. The company had previously raised over $140 million since 1999. www.ibiquity.com

Supernus Pharmaceuticals Inc., a Rockville, Md.-based developer of CNS products, has raised around $35 million in its second non-dilutive financing round. Last April, it had announced a $75 million transaction secured by royalties generated from partnered products using Supernus technologies. The company in ! 2006 raised $45 million in venture capital from firms like Abingworth Management, New Enterprise Associates and OrbiMed Advisors.

Neotract Inc., a Pleasanton, Calif.-based medical device company focused on urological and gynecological disorders, has secured $23.73 million of a $25.2 million Series B round, according to a regulatory filing. Johnson & Johnson Development Corp. was joined by return backer New Enterprise Associates. The company had previously raised just over $20 million. Neotract does not have a working website.

Cross MediaWorks, a Scottsdale, Ariz.-based multi-platform media company, has raised $17 million in new private funding. BIA Digital Partners invested $13 million, and was joined by Spring Capital Partners.

Grid Net, a San Francisco-based provider of network management software and communications products for the utility industry’s smart grid, has raised an undisclosed amount of Series C funding. A regulatory filing from last month said that the company had secured $13.8 million of an $18 million offering. Braemar Energy Ventures led the round, and was joined by return backers Catamount Ventures, GE Energy Financial Services and Intel Capital.

Replenish Inc., a Pasadena, Calif.-based developer of a “flexible” drug delivery platform, has raised $10.25 million in VC funding, according to a regulatory filing. No investor information was disclosed. www.replenishinc.com

Pinkberry, a Los Angeles-based chain of frozen yogurt shops, has secured $2.5 million of a $10.7 million VC round, according to a regulatory filing. Backers include Maveron and the Highland Con! sumer Fund. The company previously raised over $30 million. www.pinkberry.com

Return Path Inc., a New York-based provider of email management solutions, has raised $5.5 million in new VC funding, according to a regulatory filing. It previously raised around $46 million, including a $6 million Series E-2 round earlier this year. Backers include Union Square Ventures, Mobius Venture Capital, Sutter Hill Ventures and Western Technology Investments. www.returnpath.com

Ozmo Inc., a Palo Alto, Calif.-based provider of low-lower WiFi personal area network solutions, has secured $3.75 million of a $10 million Series C round, according to a regulatory filing. Backers include Granite Ventures and Tallwood Venture Capital. The company previously raised around $25 million. www.ozmodevices.com

Queplix Corp., a Princeton, N.J.-b ased developer of universal data access products, has secured $750,000 of a $1.5 million VC round led by Javelin Venture Partners, according to a regulatory filing. Noah Doyle and Jed Katz of Javelin have taken Queplix board seats. www.queplix.com

CPower, a New York-based company that helps corporate clients reduce energy usage and earn market payments for those reductions, has raised an undisclosed amount of new funding from Intel Capital, via Intel’s Open Energy Initiative. The deal is an extension of CPower’s $10.68 million in Series B round, from Mayfield Fund, Bessemer Venture Partners, Expansion Capital Partners, Schneider Electric Ventures, New York City Investment Fund and Consensus Business Group.

Buyouts Deals

American Securities has invested an undisclosed amount to help launch Delphi Midstream Partners, a firm that will acquire and invest in up to $2 billion of midstream energy sector companies and assets. Delphi’schief executiveThomas Karam previously was president & COO of Southern Union Co., while its seniorvice presidentMichael Walsh was a co-founding partner of Highstar Capital.

Gores Group and Siemens AG said that they are planning a joint bid for the enterprise solutions business of bankrupt Nortel Networks. This would be a challenge to Avaya Inc., which already has been named the “stalking horse” with a $475 million offer.

Rutland Partners! has agreed to acquire CeDo from Delton AG, for an undisclosed amount. CeDo is a European manufacturer of household disposables, with annual sales of approximately £185 million.

PE Exit

Omstead Foods, a Canadian portfolio company of TriWest Capital Partners, has sold its appetizer division to Cavendish Farms. No financial terms were disclosed for the deal, which includes processing equipment at the unit’s Wheatley, Ontario plant and a lease on the facility.

PE-Backed M&A

Apollo Global, a portfolio company of The Carlyle Group, has completed its acquisition of UK education and training company BPP (LSE: BPP). The deal was valued at approximately $607 million, including $55 million in cash from Carlyle.

Firms & Funds

CoveView Advisors has launched as a special situations advisory firm. Its principals are former JPMorgan bankers Dan Tredwell (previously with Heartland Industrial Partners), Douglas Traver and Thomas Canning.

Fidelity Investments and Deutsche Bank have signed a deal to offer Fidelity brokerage customers the opportunity to buy shares in IPOs underwritten by Deutsche. This is Fidelity’s second such deal, having previously signed one with KKR.

Human Resources

Stephen Lamb has agreed to join law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP as a partner in both the corporate and litigation departments. Lamb will also help open a Wilmington, Del. office for Paul Weiss. He has served as a vice chancellor of the Delaware Court of Chancerysince 1997, and last year presided over a case in which Apollo Management portfolio company Hexionwas found to have intentionally breached a merger agreement with Huntsman Corp. www.paulweiss.com

Michael Latimer has been named executive vice president and chief investment officer of OMERS, effective January 1.He has been president and CEO of Oxford Properties, OMERS’ real estate arm, since 2004.

Michael McMahon has joined Houlihan Lokey as a managing director and head of financial institutions. He previously was with Morgan Stanley as a managing director and co-head of diversified financials.

Skyline Ventures has promoted Glenn Reicin to the position of managing director. He had been a venture partner with the firm since last October and, before that, covered medical devices and supplies as a managing director in Morgan Stanley’s research department.