peHUB Wire: Tuesday, July 20, 2010

A few notes to kick off your Tuesday…

*** Answer Key: Yesterday I asked you to name the latest U.S. venture firm to seriously consider raising a China fund. Your hint was that it already has some Chinese companies in its general portfolio.

The answer is Highland Capital Partners, which first broached the subject in an LP advisory call last week. The basic idea would be for the China fund to have a dedicated team and its own name (probably some Mandarin translation of “higher ground”) – with Highland serving as a cornerstone limited partner.

This is basically a reflection of two sentiments at Highland: (1) China may offer more attractive investment opportunities than are permitted by international caps in its general fund; (2) It’s difficult to have a U.S.-heavy investment committee perform timely due diligence on Chinese companies, particularly when other firms have such decision-making centered in Beijing.

Again, this is all very early in the process (so early that it still may not happen). No word yet on a potential target, although something between $100 million and $200 million is reasonable (dollar-denominated). No comment from Highland, natch.

*** VC Sentiment: Last year, a survey by executive search firm Polachi Inc. found that an overwhelming majority of venture capitalists considered their industry to be “broken.” Now it seems that things might have been “fixed,” based on results being officially released later this week.

Fifty-six percent of respondents – over 98% of who! m are VC firm partners or managing partners — said they feel more con fident and optimistic about the industry today than they did one year ago. A few other findings:

• Over 72% expect steady deal-flow over the next six months, with consumer Internet/Web 2.0 representing the hottest growth industry (cleantech/energy came in second, while Internet marketing placed third).

• Respondents were evenly split on which “coast” represents the area of hottest investment opportunities.

• 46% of respondents said carried interest tax changes would have a major negative impact, while 16% believe a “work-around” would be found.

• The dark cloud related to exits, with 62% of respondents indicating that they are “very worried” and another 38% saying they were just regular “worried.”

*** Last month I wrote about The Carlyle Group’s progress in redeveloping Connecticut’s highway rest areas, after having signed a 35 year public/private partnership with the state late last year. Now comes word that the first groundbreaking begins this week on a location in North Haven.

In an AP story, Connecticut Gov. Jodi Rell said that the overall project (23 rest areas) will create 100 construction jobs over the first five years, and more than 200 additional workers are expected to be hired once the revamps are complete.

Top Three

Castle Harlan has agreed to sell Ames True Temper, a maker of non-powered lawn tools and accessories, to Griffon Corp. for $542 million. Credit Suisse and UBS advised Ames True Temper on the deal.

Skinit Inc., a San Diego-based provider of technology and products for on-demand customization of personal electronic devices, has raised $60 million from ABS Capital Partners and Norwest Equity Partners.

Founders Fund has closed its third fund with $250 million in capital commitments. The San Francisco-based firm had raised $220 million for its second fund in 2007, and $55 million for its debutvehicle in 2005.

VC Deals

Pantech Biosolutions AG, a Liechtenstein-based developer of transdermal delivery solutions for large-molecular weight drugs, has raised CHF20 million($19m) led by StemCell Holding AG. The company previously raised CHR 6.3 million in Series A funding led by Gamma Capital Partners.

DiagnosisONE, a Nashua, N.H.-based provider of clinical decision support solutions, has raised $5 million from Edison Venture Fund.

LedEngin Inc., a Santa Clara, Calif.-based maker of LED lighting components, has raised an undisclosed amount of Series D funding. NGP Energy Technology Partners led the round, and was joined by return backers WK Technology Fund, Partech International, Horizon Ventures and Eyon Group.

Buyouts Deals

The Blackstone Group and TPG Capital reportedly are “unlikely” to keep pursuing RadioShack Corp. (NYSE: RSH). The firms had been working together on a joint bid for the electronics retailer, which has a market cap of around $2.7 billion. Bain Capital also has dropped out of the process.

The Carlyle Group has agreed to acquire Qualicorp, a Brazilian health insurance plan administrator. No financial terms were disclosed. Sellers include private equity firm General Atlantic, which bought a minority stake back in 2008.

Navigation Capital Partners has acquired LEPService Inc., a provider of metering infrastructure-related services to electric utilitie! s in the Southeastern U.S. No financial terms were disclosed.

One Equity Partners has offered to buy out remaining shareholders of Austria’s Constantia Packaging (VI: CVER) at €47 per share. One Equity already holds a 91.5% ownership position in Constantia, and its “squeeze-out” offer would value the remaining 8.5% at €67 million.

Onex Corp. and Canada Pension Plan Investment Board have offered to buy UK auto parts maker Tomkins PLC (LSE: TOMK) for $4.5 billion. Read more…

Revelry Brands has acquired a minority stake in Siggi’s, a New York-based maker of Icelandic-style thick yogurt. No financial terms were disclosed.

RBS received three bids for its$4 billion WorldPay payment processing unit, from TPG Capital, Clayton, Dubilier & Rice and Bain Capital/Advent International.

Sun Capital Partners has acquired Bar Louie Restaurants, a Chicago-based casual-to-upscale restaurant chain, from an affiliate of Restaurant America. No pricing terms were disclosed. Read more…

PE-Backed IPOs

Green Dot Corp., a Monrovia, Calif.-based seller of prepaid debit cards, has increased the number of shares being offered in its IPO from3.85 million to 4.17 million. It still plans to price the shares at between $32 and$35. Company shareholders include Sequoia Capital (31.9% pre-IPO stake) and Total Technology Partners (10.8%).

PE-Backed M&A

Curse Inc., a San Francisco-based gaming portal focused on MMOGs, has acquired World of Warcraft news site from Major League Gaming. No financial terms were disclosed. Curse has raised $11 million fromVentech, SoftTech VC and AGF Private Equity. MLG has raised over $32 million in VC funding fromOak Investment Partners.

PE Exits

Atheros Communications Inc. (Nasdaq: ATHR) has agreed to acquire Opulan Technologies Corp., a Chinese fabless semiconductor company focused onpassive optical networking and broadband access aggregation. The deal is valued at $72 million in cash, plus possible cash earn-outs. Opulan has raised VC funding from firms like AsiaVest Partners, Acorn Campus, KLM Capital Group and Transwitch Corp.

Dell Inc. (Nasdaq: DELL) has agreed to acquire Ocarina Networks, a San Jose, Calif.-based developer of online storage optimization solutions. No financial terms were disclosed. Ocarina had raised around $31.3 million in VC funding from Jafco Ventures,Kleiner Perkins Caufield &! Byers and Highland Capital Partners.

Human Resources

Jason Glover has agreed to join Simpson Thacher & Bartlett as a partner in the firm’s London office, where he will form a UK funds practice. He currently is a partner with Clifford Chance.

Paul Legvold has joined Korn/Ferry International as a senior client partner and head of the executive search firm’s asset management practice. He previously ran the North American asset management practice for Heidrick & Struggles.

Mark Oxley has joined Atlantic-Pacific Capital as a principal in the firm’s direct private placements group. He previously was with Lazard.

Roger Wood has joined Moelis & Co. as a senior advisor to power and infrastructure clients. He previously was with Rothschild as head of North American utilities and global co-head of utilities and infrastructure.