peHUB Wire: Tuesday, January 26, 2010

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*** This is kind of old news, but since no one else seems to have written it: Vestar Capital Partners late last year closed its Japanese affiliate, which originally launched in the summer of 2006. In a letter sent to LPs, the firm said:

“We have decided to discontinue our efforts in Japan following a three year period. Notwithstanding the hard work and diligent efforts by our Tokyo team, the Japanese market continues to be challenging for private equity, and our ability to find attractive investments did not meet our expectations. As a result, we have closed our Tokyo office and are no longer looking to! make direct investments in Japanese buyouts.”

All of the Japan staff is gone, save for John Wodard, who has returned to the U.S. to lead the firm’s diversified industries group.

*** Nearly two years ago, I conducted an on-stage interview with Carl Icahn. We mostly discussed economic conditions and shareholder activisim, but I also asked about his minority investment in mobile content management startup Motricity. The company was an unusual target for Icahn — privately-held, VC-backed — and had recently announced plans to cut up to 350 workers and relocate its headquarters.

Icahn’s explanation, in short, was to blame his son. “My son liked it and talked me into it… I said okay, and I’m not sure it was the right decision.”

Got to wonder if Carl is now wishing he’d taken a bit more credit for the deal. Motricity recently filed for a $250 million IPO, and reported strong year-over-year growth. It’s still in the red, but the shade has morphed into a pale pink.

*** Last week, I mentioned that not all current partners with Polaris Venture Partners will stick around for the next fund. One departee will be Bob Geiman, who focused on IT investments out of the firm’s Waltham, Mass. Office. No word yet on his future plans.

*** Nominations for Buyouts Magazine’s Deals of the Year Awards are due this Friday. Get info here.

*** Geography Note: I drove down to New York City yesterday, and will be here for the rest of the week. Plan to spend some time at the PEA Outlook conference today and tomorrow (expect some live-blogging), and will moderate a panel at the Columbia B-School Conference on Frid! ay. And, yes, I’ll be back next week for the peHUB Shindig.

Top Three

Generac Holdings Inc., a Waukesha, Wis.-based maker of standby and portable generators, has increased the proposed size of its IPO from $300 million to $427.66 million. It still plans to trade on the NYSE under ticker symbol GNRC, with J.P. Morgan and Goldman Sachs serving as co-lead underwriters. CCMP Capital and Unitas Capital bought Generac for approximately $2 billion in late 2006.

KKR has formed a partnership to invest in consumer services, education and media businesses, alongside former Kaplan CEO Jonathan Grayer.

Sofinnova Partners, a Paris-based venture capital firm, has closed its sixth fund with €260 million in capital commitments. MVision served as placement agent, while limited partners include CDC Entreprises, Industrial & Financial Investments Co., JP Morgan Asset Management, Partners Group and Skandia Life Insurance Company.

VC Deals

Unidesk, a Marlborough, Mass.-based provider of virtual desktop management software, has raised $12 million in Series B funding. Return backers include Matrix Partners and North Bridge Venture Partners.

MiLife has raised $4 million in new VC funding from return backers New Venture Partners and Unilever Ventures. The company spun out from Unilever in late 2008 to providetechnology solutions for personalized weight management. It is now renaming itself Imperative Health, and changing its focus to managing health risks associated with diabetes, high blood pressure, obesity and raised cholesterol.

Quest Discovery Services Inc., a San Jose, Calif.-based provider of outsourcing solutions for medical and public records acquisition, has raised $3.75 million in mezzanine funding from the Central Valley Fund. Proceeds will be used to refinance debt and support acquisitions.

IgnitAd, an Israeli developer of online ad optimization solutions, has raised an undisclosed amount of seed funding from DFJ Tamir Fishman Ventures and JVP Media Studio.

Buyouts Deals

BaltCap has acquired aircraft repair company Air Maintenance Estonia from SAS for an undisclosed amount. In unrelated news, BaltCap has partnered with the European Investment Fund to launch a €30 million vehicle focused on VC opportunities in Latvia.

PE-Backed IPOs

Graham Packaging Co., a plastic container maker owned by The Blackstone Group, has set its IPO terms to 23.33 million common shares being offered at between $14 and $16 per share. It plans to trade on the NYSE under ticker symbol GRM, with Citi, Goldman Sachs and Deutsche Bank Securities serving as co-lead underwriters.

QuinStreet Inc., a Foster City, Calif.-based provider of online vertical marketing solutions, has set its IPO terms to 10 million common shares being offered at between $17 and $19 per share. It had originally filed to raise $250 million. The company plans to trade on the Nasdaq under ticker symbol QNST, with Credit Suisse, BoA Merrill Lynch and J.P. Morgan serving as co-lead underwriters. QuinStreet has raised nearly $60 million in VC funding, from firms like Split Rock Partners (16.3% pre-IPO stake), Sutter Hill Ventures (10.5%), Granite Global Ventures (7.6%), Catterton Partners (5.8%), Partech International (5.5%), Focus Ventures, Rosewood Capital,Charter Growth Capital, VSP Capital, J&W Seligman and Stanford University. Direct secondaries firm W Capital Partners holds a 6.8% stake.

PE-Backed M&A

Prometheus Laboratories Inc., a San Diego-based drug and diagnostics company, has acquired U.S. licensing rights to kidney cancer drug Proleukin from Novartis. No pricing terms were disclosed for the deal, which includes an up-front fee and possible milestone payments. Net U.S. sales last year for Proleukin were $75 million. 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%) and Brentwood Venture Capital (7.5%). Caprion Proteomics Inc., a provider of proteomics-based service to the pharma and biotech industries, has acquired the biomarker services unit of PPD Inc. (Nasdaq: PPDI). No financial terms were disclosed. Caprion Proteomics is a portfolio company of Great Point Partners.

Firms & Funds

The Environmental Innovation Fund, a cleantech VC vehicle formed by the UK Innovation Investment Fund and managed by Hermes Private Equity, has held a first close on£125 million in capital commitments.

Human Resources

Gerd Haeusler is leaving RHJ International, in order to become CEO of troubled German bank BayernLB.

Tom Renyi has joined CVC Capital Partners as a senior advisor. He recently retired as chairman of The Bank of New York Mellon Corp., after also having served as its chief executive.

Versa Capital Management, a Philadelphia-based turnaround firm, has opened offices in Chicago and Los Angeles. The Chicago office will be led by Suzanne Yoon, a former senior vice president of CIT’s national restructuring group. The LA office will be led by David McReynolds, a former principal with American Capital.

Carla Zilka, founder of NexGen Advisors, has joined the advisory board of Hudson Clean Energy Partners.