peHUB Wire: Tuesday, June 15, 2010

The sun is shining, the Celts are one win away and soon I’ll be flying (mid)west for tomorrow night’s peHUB Shindig and Thursday’s Buyouts Chicago conference. In other words, it’s time for some Tuesday Talkback.

* First up is reaction to yesterday’s column on Europe’s alternative investment proposals, and how they could cripple the global private equity market. Steve: “This could prove disastrous for non-European firms whose LP bases are heavily European but, overall, wouldn’t it help abate the industry overhang you discussed last month?”

Timothy: “Has there ever been a worse year for private equity? We might have to register funds, get our taxes doubled and lose two sources of capital (banks, European LPs). Soon we’ll need a bailout.”

Michael: “EU investors tend to disproportionately invest in non-European Assets, i.e. 95+% of EU biotech funds are invested in US assets, similarly high-tech etc. This jives with the general assumption, that the US is an attractive market for investors. The resulting lack of that capital to drive alternative asset driven job growth is frustrating to say the least from an economic development and job growth perspective (a favorite argument by pro-PE lobbyists). Hence, one of the underlying motivations may lie in trying to keep more EU capital domestic and make it work domestically instead of it being siphoned off in other regions. That is a fair policy decision (i.e. as fair as protective tolls deployed in the US, say against Brazilian ethanol).”

* Andrei on Trusted Insight, the new alternatives “matching” service: “Half of the readers just grabbed their foreheads – ‘Why didn’t I think of it first?!’ The other half only smirked.”

* Very opposing views on the Tony Hsieh’s changing story of the Zappos sale to Amazon. Brian: “So you were right, he was wrong, blah, blah. A whole Wire devoted to gloating? We don’t care.” Samuel: “Thanks for the update. The fact that you follow up on old stories is one of the reasons I keep reading.”

* Mia: “What do you think of Nate Robinson now?” He still scares me, but it’s the fear is now closer to exhilaration than to dread.

* Larry: “Where is the next peHUB Shindig going to be?” I’m hoping to make that announcement next week. Think south. And think a city we haven’t been to before.

Top Three

Softbank Corp. has invested approximately $147.4 million into social gaming company Zynga, which previously had raised around $240 million in VC funding. Existing Zynga shareholders include Digital Sky Technologies, Andreessen Horowitz, Tiger Global, Institutional Venture Partners, Kleiner Perkins Caufield & Byers, Union Square Ventures, Foundry Group and Avalon Ventures.

TerraPower LLC, a Bellevue, Wash.-based developer of new options for nuclear energy production, has raised $35 million in Series B funding. Backers include Charles River Ventures, Khosla Ventures, Nathan Myhrvold and Bill Gates.

Starwood Capital Group has filed a legal objection to Centerbridge Partners’ deal to buy bankrupt hotel chain Extended Stay, claiming that the auction process was flawed due to conflicts of interest. Starwood had been a rival bidder to Centerbridge.

VC Deals

PicoChip, a Bath, England-based provider of signal processing products for wireless communications, has raised $20 million in sixth-round funding. Return backers include Atlas Venture, Highland Capital Partners, Intel Capital, Pond Ventures, Rothschild, Samsung and Scottish Equity Partners. The company previously raised over $84 million.

Netuitive Inc., a Reston, Va.-based provider of real-time analysis software for business service management, has raised $10 million in new VC funding. Rembrandt Venture Partners was joined by return backer MK Capital. The company previously raised over $27 million from MK, Cross Creek Capital, Bessemer Venture Partners, Columbia Capital, Flagship Ventures, Noro-Moseley Partner and Thomas Weisel Venture Partners.

BeachMint, a developer of social commerce sites catering to individual verticals, has raised $5 million in VC funding, according to TechCrunch. Investors include New Enterprise Associates and Anthem Venture Partners. Company founders Diego Berdakin and Josh Berman previously were running Slingshot Labs for News Corp.

Axtria Inc., an Indian developer of sales and marketing analytics, has raised $2.5 million in Series A funding led by Sequoia Capital India.

Work Market, a marketplace for ! employers and workers to connect, has raised an undisclosed amount of funding led by Spark Capital andUnion Square Ventures. The company’s website says that it is building a “modular web platform, designed to power anyone or any business to efficiently deliver and manage labor and services.”

Buyouts Deals

Aquiline Capital Partners has purchased $35 million worth of common and preferred stock in Bank of North Carolina (Nasdaq: BNCN). The deal gives Aquiline a 9.9% common shareholding, and the conversation possibility of upwards of 15% of all outstanding shares.

Brazos Private Equity Partners has invested an undisclosed amount in Flint Trading Inc., a Thomasville, N.C.-based maker of preformed thermoplastic road and safety markings.

Freeman Spogli & Co. has acquired a majority stake in The Paradies Shops Inc., operator of over 500 travel retail shops in airports and hotels. No financial terms were disclosed. Genesis Capital advised Paradies Shops on the deal.

Forbes Media has retained Jordan, Edmiston Group to find a buyer for financial education website Investopedia.

Spice PLC (LSE: SPI), a UK-based provider of engineering and support services to the utilities sector, has rejected a buyout offer from Cinven that would have valued the company at nearly £200 million.

PineBridge Investments, a private equity affiliate of PCCW Ltd., reportedly may lose control of Bulgarian telecommunications operator Vivacom to company lenders.

TPG Capital reportedly has dropped out of the $4 billion auc! tion for WorldPay, Royal Bank of Scotland’s payment processing unit. There had been talk of TPG partnering on a bid with Clayton Dubilier & Rice.

PE-Backed IPOs

Tesla Motors, a San Carlos, Calif.-based maker of electric vehicles, has set its IPO terms to 11.1 million common shares being offered at between $14 and $16 per share. It would have an initial market cap of approximately $1.46 billion, were it to price at the high end of its range. Tesla has raised over $220 million in VC funding from firms like Draper Fisher Jurvetson, Daimler AG and VantagePoint Venture Partners.

PE-Backed M&A

Adenyo (f.k.a Silverback Media), a Toronto-based provider of mobile marketing software, has acquired KinetX, an aerospace engineering consulting and contracting company. No financial terms were disclosed Adenyo recentlyraised US$26.9 million in financing led by Genuity Capital Markets, and also acquired VC-backed mobile ad company MoVoxx.

Exopack Holding Corp., a packaging platform sponsored by Sun Capital Partners, has agreed to buy the Menasha, Wis. and Tulsa facilities of Bemis Co. (NYSE: BMS). The deal is valued at $81 million in cash.

PE Exits

IBM has agreed to buy Coremetrics Inc., a San Mateo, Calif.-based provider of Web analytics software. No financial terms were disclosed. Coremetrics has raised around $167 million in VC funding since 1999. Current shareholders include Accel Partners, FTV Capital, Highland Capital Partners, and W Capital Partners.

IBM Corp. is in talks to acquire data storage company Storwize Inc. for $140 million, according to an Israeli press report. Storwize has raised around $28 million in VC funding from Sequoia Capital, Bessemer Venture Partners, Tenaya Capital, Tamares Group and Tokyo Electron Device.

Nexon Corp. has acquired a 67% stake in online game developer Ndoors, from shareholders that include VC firm Walden International (13% stake).

Human Resources

Eric Carlborg has joined VC firm August Capital to focus on later-stage investments. He previously was with Continental Investors.

Carlos Mendez has joined Sandler O’Neill + Partners to lead a new structured finance group. He previously was a senior managing director in the capital markets division of Institutional Credit Partners.

Yaz Miyoshi has joined Greenhill & Co. as a Tokyo-based managing director. He is a co-founding partner of Japanese private equity firm The Longre! ach Group.

Kevin Raidy has been named head of the private equity capital markets group at Cowen & Company. He previously was a managing director with Ramius LLC.

TowerBrook Capital Partners has retained Thomas Flocco to explore investment opportunities in the consumer goods space. He is the former CEO of Beam Global Spirits & Wine, and a former partner at McKinsey & Company.

Chris Young has joined Berkery Noyes as a managing director focused on M&A activity in the financial IT sector. He previously was global director of business and product strategy at Dow Jones.