peHUB Wire: Thursday, June 17, 2010

Greetings from Day 2 in Chicago, where I’m soon needed downstairs to moderate a mid-market debt panel (and then the keynote panel later this afternoon). But first, some notes:

*** It seems my editorial theme this month has been the future of private equity, from the perspective of capital availability. Institutional liquidity challenges had already made it tough for firms to raise new funds, and the Volcker Rule and proposed European regulations could take a permanent bite out of the limited partner pie.

So let me throw one more thing at you: What if public pensions eventually switch from defined benefit plans to defined contribution plans?

I know this isn’t happening tomorrow or Saturday, but it will have to happen at some point (even if it takes a state “bankruptcy” to force the issue politically). And, when it does, private equity will lose its single-largest pool of capital.

Now it’s possible that, by that point, someone will have figured out how to make alternative investments work within a defined contribution plan – or laws will have changed for that purpose. And, even were state systems to switch, it would probably do so first for newer employees (as many corporations have done).

Again, it’s not an immediate concern. But for all the talk about the future of private equity, it surprises me that so few of the conversations involve discussion of capital supply – without which all the other issues are largely irrelevant.

*** AOL’s purchase of social network Bebo might go down as one of the worst-ever acquisitions of a VC-backed company (and, conversely, one of the craftiest VC exits).

AOL paid $850 million to buy Bebo two years ago, and yesterday sold it to Los Angeles-based Criterion Capital Partners. No deal terms are being discussed, but my understanding is that Criterion ! originally bid just $2.5 million. It was the only offer, but AOL asked them to bulk the bid up a bit. Criterion apparently complied – I don’t know the final figure – but it is unlikely to be much higher than $5 million. Ouch!

*** It was good seeing a bunch of Chicago readers at last night’s Shindig, which was generously sponsored by Crowe Horwath and Conversus Asset Management.

I’m also pleased to announce that attendees voted to give the ticket proceeds to Access to Care, a Chicago group that helps provide health services to those who fall into the economic gap between qualifying for public assistance and being able to afford private insurance.

Top Three

Stion, a San Jose, Calif.-based maker of thin-film solar panels, has raised $70 million in Series D funding. Venture Tech Alliance led the round, and was joined by Taiwan Semiconductor Manufacturing Co. and return backers Khosla Ventures, Lightspeed Venture Partners, General Catalyst Partners and Braemar Energy Ventures. The company previously raised $44.6 million.

Home Dialysis Plus Ltd., a Portland, Ore.-based developer of home hemodialysis devices for patients suffering from end-stage renal disease, has secured a $50 million equity commitment from Warburg Pincus.

Madison Dearborn Capital Partners has completed its take-private acquisition of BWAY Holding Co., a North American supplier of general line rigid containers. BWAY stockholders received $20 per share, for an enterprise value of approximately $915 million (including assumed debt). Bank of America Merrill Lynch and Deutsche Bank Securities provided leveraged financing.

VC Deals

Carrier IQ Inc., a Mountain View, Calif.-based provider of mobile service intelligence solutions for wireless carriers and equipment vendors, has raised $12 million in Series D funding. Bridgescale Partners led the round, and was joined by return backers Intel Capital, Mohr Davidow Ventures, Accel Partners, Charles River Ventures and Nauta Capital. The company previously raised $43 million.

GreenWave Reality, developer of a home energy management platform, has raised $11 million in VC funding led by Craton Equity Partners. The company has offices in the U.S., Denma! rk and Singapore.

LifeShield Security, a Yardley, Penn.-based provider of digital home security systems, has raised nearly $11 million in second-round funding. First Round Capital, MHS Capital and NewSpring Growth Capital were joined by return backers Associated Partners, CenterPoint Ventures, Novitas Capital and NutriSystem CEO Michael Hagan.

KXEN, a San Francisco-based provider of data mining automation solutions, has raised $8 million in Series D funding. Next Stage led the round, and was joined by existing backers XAnge Capital, Sofinnova Ventures, Saints Capital and Motorola Ventures.

Buyouts Deals

CVC Capital Partners and Italian firm F2i reportedly have pulled out of the bidding for Endesa SA’s gas grid, which is believed to be worth around $1.3 billion.

Industrial Opportunity Partners has invested an undisclosed amount into Edelbrock LLC, a Torrance, Calif.-based maker of automotive aftermarket products. The deal was done in partnership with company management.

Kerzner International, a Bahamas-based luxury resorts operator, has hired The Blackstone Group for advice on restruc! turing around $3.2 billion in debt.

Lime Rock Resources has acquired oil and gas interests in Oklahoma’s West Edmund Hunton Lime Unit, for $100 million.

PE-Backed IPOs

BroadSoft Inc. (Nasdaq: BSFT) shares fell 7.8% in their first day of post-IPO trading. Company shareholders include Bessemer Venture Partners, Grotech Ventures, Charles River Ventures, Columbia Capital, RRE Ventures, Crescendo Ventures and Meritech Capital Partners.

Fairfield Energy, a British oil and gas company controlled by Warburg Pincus, said it plans to raise between $450 million and $500 million via a floatation in London.

Higher One Holdings Inc., a New Haven, Conn.-based provider of technology and payment services to the higher education industry, raised around $108 million in its IPO. The company priced 9 million shares at $12 per share, afte! r having planned to sell 14.25 million shares at between $15 and $17 each. Shareholders include Lightyear Capital, Club Circle Partners, North Hill Ventures and Hanseatic Americas LDC.

Inphi Corp., a Sunnyvale, Calif.-based maker of analog semiconductor solutions for the communications and computing markets, has filed for a $115 million IPO. It plans to trade on the Nasdaq under ticker symbol IPHI, with Morgan Stanley, Deutsche Bank and Jefferies & Co. serving as co-lead underwriters. The company has raised more than $50 million in VC funding from Walden International (20.8% pre-IPO stake), Tallwood Venture Capital (20.5%), Mayfield Fund (18.6%) and Dali Hook Partners.

Oasis Petroleum Inc., an oil and gas exploration company owned by Encap Investments, raised around $588 million in its IPO. The company priced 42 million shares at $14 per share ($13-$15 range), for an initial market cap of approximately $1.29 billion. It will trade on the NYSE under ticker symbol OAS, while Morgan Stanley and UBS served as co-lead underwriters.

PE Exits

Apax Partners has sold its 5.4% stake in Belgium-based biotech company Galapagos NV (Euronext: GLGP), via a private placement to undisclosed investors.

M/C Venture Partners has completed its sale of Fusepoint Inc., a provider of managed IT and colocation services to enterprises in Canada, to Savvis Inc. (Nasdaq: SVVS). The deal was valued at $124.5 million in cash.

Firms & Funds

Partners Group has closed a new mezzanine debt fund with €553 million in capital commitments.

Human Resources

Alex DeAraujo has joined Welsh, Carson, Anderson & Stowe as an operating executive within the firm’s portfolio management group. He previously was a senior manager with Bain & Co., focused on operating initiatives for PE deals and post-M&A integration.

Chris Langone has joined Symphony Technology Group as vice president of business development. He will be based in Palo Alto, and previously was a New York-based vice president with Redwood Capital Group.

Manikkan Sangameswaran has joined ICICI Venture to lead a soon-to-be-launched infrastructure fund. He previously ran Babcock & Brown Infrastructure’s India unit.