*** I was off duty last week when KKR filed the S-1 for its un-IPO, and neglected to take an actual look until yesterday. Not too much new info, save for the following fund performance data (through 12/31/09) that I haven’t seen reported elsewhere:
• European Fund (1999): 100% called, 26.8% IRR
• Millennium Fund (2002): 100% called, 25% IRR
• European Fund II (2005): 100% called, -13% IRR
• 2006 Fund (2006): 74% called, -2% IRR
• Since its founding, KKR funds have a 25.8% IRR.
My first thought upon seeing the numbers was that the 2006 Fund is beginning to look a bit light on dry powder, particularly given that mega-buyout funds from that vintage may need to hold a bit more reserve capital than usual (due to possible refinancings, etc.). Plus, KKR keeps being tied to possible multi-billion take-privates like Harley-Davidson.
So I rang up a few KKR LPs, to see if the firm had begun formal fundraising for its next North American vehicle. The reply is that while KKR has been pre-marketing since last year, no formal PPM is expected until at least Q3. Seems KKR believes most LPs won’t be ready to make major commitments until the new calendar year, plus it would be easier to wait until the NYSE listing is out of the way (probably in early summer).
*** This morning I wrote a blog post about Trada, a crowd-sourced online ad opt! imization platform that is coming out of beta mode. The Boulder, Colo.-based company also announced that it has raised $2.2 million in VC funding from Foundry Group.
Interesting tidbit on the funding: This is the third startup that Trada CEO Niel Robertson has done with members of the Foundry team, but the first with Foundry itself. His first startup, Service Metrics,was funded by Foundry’s Brad Feld, when Feld was still with Softbank. His second startup, Newmerix, was funded by Feld and Seth Levine, when they were both at Softbank spinout Mobius Venture Capital. Robertson also served as a CTO-in-residence with Mobius, and was a venture partner with Fidelity Ventures.
*** When Financial Engines shot up 44% Tuesday in its first day of trading, media reports termed it a “home run” and lauded the “best IPO performance in months.” In response, Benchmark Capital’s Bill Gurley wondered if a better characterization would have been that the Financial Engines IP! O was “poorly executed/priced.”
Whole thing reminded me that we still don’t have a near-perfect way of judging IPO success. We can judge how a VC investment in the company performed, and can judge how the company priced or traded against revenue or EBITDA multiples, but not whether and IPO is a “success” or “failure” (save for its ability to price at all). Our typical metric is aftermarket performance but, as Gurley points out, that could simply be the result of a poor initial price point. This seems to be something worth working on…
*** Just before I hit send, The Carlyle Group announced an initiative with the Environmental Defense Fund. Will post about it shortly.
*** March Madness: The men’s NCAA tourney begins in just a few hours, so be sure to join our pool. Among the prizes is a chance to own this space for a day. Full details here.
*** Survey Time: Twice each year, we team up with ACG to get a sense of de! al-maker sentiment and prognostication. Please take a few moments to fill out the latest survey by going here.
Top Three
KKR is said to be considering a buyout offer for motorcycle maker Harley-Davidson Inc. (NYSE: HOG), helping send the company’s shares up 6% in Wednesday afternoon trading. The company’s market cap is approximately $6.6 billion.
UpWind Solutions Inc., a Medford, Ore.-based provider of wind asset management services, has raised $28.8 million in second-round funding. Kleiner Perkins Caufield & Byers led the round, and was joined by return backer MissionPoint Capital Partners.
Donald Layton has joined NewOak Capital as a senior advisor and co-chair of the firm’s investment committee. He also will help lead the development of a private equity vehicle for bank recaps. Layton is the vice chairman and co-CEO of J.P. Morgan Chase and former chairman and CEO of E*Trade Financial Corp.
VC Deals
OriGene Technologies, a Rockville, Md.-based developer of monoclonal antibodies, has raised $16 million in Series B funding. New backers included IDG-Accel, SBI & TH Venture Capital Enterprise and Zero2IPO. Return participants were Morningside Venture Investments and President International Development Corp. The company also has operations in China.
Solar Junction Corp., a San Jose, Calif.-based developer of triple junction solar cells for the concentrated solar market, has raised $13.33 million in Series C funding. New Enterprise Associates led the round, and was joined by return backers Advanced Technology Ventures and Draper Fisher Jurvetson.
Energy Micro, an O! slo, Norway-based developer of “energy-friendly” microcontrollers, has raised $13 million in first-round funding from Northzone Ventures and Investinor.
CircleControl, a London-based outsourced manager of IT infrastructures, has raised £6 million in VC funding from Scottish Equity Partners.
Playdom, a MountainView, Calif.-basedsocial gaming company, has invested $5 million into Argentina-based social gaming company MetroGames. Playdomlast yearraised a $43 million Series A round at around a $300 million post-money valuation, from New Enterprise Associates, Lightspeed Venture Partners and Norwest Venture Partners.
Videoplaza, a Swedish provider of video ad serv ing solutions for publishers, has raised €3.5 million in VC funding from Creandum and Northzone Ventures.www.videoplaza.com
Smartling, a New York-based provider of real-time transalation via the Web, has raised $4 million in Series A funding. Venrock led the round, and was joined by First Round Capital, U.S. Venture Partners and individual angels. www.smartling.com
EvoStor Inc., a Campbell, Calif.-based storage software startup, has raised $3 million in second-round funding,according to a regulatory filing.Return backersincluded Hummer Winblad Venture Partners, Starfish Technology Fund and Southern Cross Group. The company previously raised $5 million.www.evostor.com
Second Porch, a Portland, Ore.-based social vacation home marketplace, has raised $1 million in Series A funding le! d by the Oregon Angel Fund.
Buyouts Deals
Apax Partners is in talks to acquire video conferencing company Polycom Inc. (Nasdaq: PLCM) for more than $3 billion, according to The Financial Times. The formal offer would be at around $37 per share, and could come within the next two weeks.
Apollo Management, Blackstone Group and Colony Capital reportedly have expressed interest in acquiring WestLB’s real estate finance unit.
KSL Capital Partners has acquired Carlsbad, Calif.-based La Costa Resort and Spa. No financial terms were disclosed.
NVM Private Equity! has sponsored a £3 million management buyout of Lanner Group, a UK-based provider of business simulation software. ICON Corporate Finance provided financing for the deal. www.lanner.com
OpenGate Capital has acquired Philips Business Communications, a provider of telecom and data solutions in Brazil, from Philips. No financial terms were disclosed for the deal, which represents Los Angeles-based OpenGate’s first transaction in South America.
Riverside Partners has acquired a majority stake in Thinklogical LLC, a Milford, Conn.-based provider of fiber optic video and KVM switc hing and extension products. No financial terms were disclosed.
Skyview Capital has acquired the RAS-TRAX business unit of UTStarcom (Nasdaq: UTSI). No financial terms were disclosed. The Bensenville, Ill.-based unit will be renamed Traxcom Technologies, and provides secure transaction processing products and technologies.
Starwood Capital Group, TPG Capital and Five Mile Capital Partners have agreed to invest up to $905 million in Extended Stay Hotels Inc. The investment would be part of arecapitalization that would allow the hotel chain to emerge from bankruptcy at a $3.9 billion valuation.
PE-Backed M&A
Prometheus Laboratories Inc., a San Diego-based drug and diagnostics company, hassigned an oncology research collaboration and license agreement with Bayer Schering Pharma AG. The deal could be worth upwards of $160 million in up-front and milestone payments. Prometheus is in registration for a $100 million IPO, and has raised around $73 million in VC funding from DLJ Merchant Banking Partners (21.4% stake), Split Rock Partners (17.4%), New Leaf Ventures (12.5%), Apax Partners (11%), Wachovia Capital Partners (11%) andBrentwood Venture Capital (7.5%).
PE Exits
Actis has sold its 30% stake in Regal Forest Holding Co. to a subsidiary of Mexican department store operator El Puerto de Liverpool. No financial terms were disclosed. Regal Forest is a durable consumergoods retailer in Central America andthe English-speaking Caribbean.
Bridgepoint Capital plans to sell about half its stake, or up to 32 million shares, in UK self-storage retailer Safestore Holdings PLC (LSE: SAFE). Bridgepoint is the company’s largest shareholder, with around a 35% stake.
Gilat Satellite Networks Ltd. (Nasdaq: GILT) has agreed to acquire Raysat Antenna Systems, a Vienna, Va.-based. The deal is valued at around $25 million in cash, and is expected to close within the next six months. Raysat has raised around $37 million in VC funding from Benchmark Capital, Apax Partners and Israel Seed Partners.
Yahoo Inc. (Nasdaq: YHOO) has agreed to acquire Citizen Sports, a San Francisco-based operator of a virtual market for professional athlete futures. No financial terms were disclosed. Citizen Sports had raised over $25 million in VC funding from firms like Northgate Capital and Radar Partners.
Firms & Funds
AOL Inc. has launched a $10 million venture capital fund focused on “hyper-local” Internet startups, as part of a larger strategic focus on expanding the company’s local content.
Human Resources
Roger Marrero has joined Comvest as a managing director, working out of the firm’s West Palm Beach, Fla. office. He previously was a principal with ABRY Partners in Boston.
Paul Miller has joined Empire Investment Holdings as a senior vice president of M&A.
Henry Robin has joined North Sea Capital as a senior partner, and head of the Denmark-based firm’s New York office. He previously was a partner with AlpInvest.
Rob Solomon has joined Chicago-based social commerce website Groupon as president and chief operating officer. He previously was a venture partner with Technology Crossover Ventures and! , before that, was president and CEO of travel search site SideStep. Groupon has raised nearly $35 million in VC funding from firms like Accel Partners and New Enterprise Associates.
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