peHUB Wire: Wednesday, April 14, 2010

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*** Greycroft Partners today announced that it has closed its second fund with just over $130 million in capital commitments. This is the early-stage VC firm launched several years back by Alan Patricof, with a focus on digital media. A few quick notes:

1. Patricof has promised LPs that Greycroft will never raise more than $150 million for a fund. Ever.

2. That said, this vehicle is much larger than Greycroft’s debut effort, which originally closed on $50 million before later expanding to $75 million. The idea for the larger fund is to do more deals, rather than to do larger deals.

3. Greycroft is in the process of hiring a new partner for its Los Angeles office, but has not yet decided between a couple of finalists for the job. The firm also has promoted principal Ian ! Sigalow to partner.

4. Greycroft will continue to use the Village Ventures network for certain back-office functions, in exchange for a fee.

*** Kudos to The Blackstone Group, which has altered the portfolio/transaction fee-sharing arrangement on its new global buyout fund (slated for a June 30 close). The firm traditionally has gone with a 50/50 split, but reportedly has shifted toward LPs with a 65/35 arrangement.

I’d obviously prefer a 100/0 arrangement (a la Warburg Pincus), and Blackstone clearly is making this move to curry favor with fence-sitting investors. But any movement away from GP fee-hogging (which leads to GP fee-charging) is a positive, so chalk this one up as Blackstone done good.

*** Today’s peHUB Wire comes to you from 30,000 feet, as I’m en route to San Francisco for tonight’s peHUB Shindig and tomorrow’s Buyouts West event. Look forward to se eing a bunch of you there… And, yes, I’ll be back in Boston on Friday to moderate a panel for MIT’s Private Equity Symposium. If you’re hanging out at SFO tomorrow night at around 11pm PT, drop me a note and we’ll drink strong coffee together.

Top Three

TA Associates has acquired a minority stake in Aurora Networks, a Santa Clara, Calif.-based developer of advanced optical transport systems for broadband networks. No financial terms were disclosed for the deal, in which TA bought shares from existing aurora details. Specific sellers were not identified, but aurora has raised over $60 million from firms like Sprout Group, Battery Ventures, ComVentures and Castile Ventures., a Sunnyvale, Calif.-based P2P lending network, has raised $24.5 million in Series C funding. Foundation Capital led the round, and was joined by return backers Morgenthaler Ventures, Norwest Venture Partners and Canaan Partners. The company had previously raised over $22 million.

Greycroft Partners has closed its second fund with $130.7 million in capital commitments. Its debut fund was capitalized with $75 million.

VC Deals

BioSpace Med, a France-based orthopedic imaging company, has raised $18 million in new VC funding. CDC Entreprises was joined by return backers Edmond de Rothschild Investment Partners, Crédit Agricole Private Equity, UFG Private Equity, NBGI Ventures and COFA Invest. The company previously raised just under $30 million.

ServiceMax, a Santa Clara, Calif.-based provider of field service management solutions via the cloud, has raised $8 million in Series B funding. Trinity Ventures led the round, and was joined by return backers Emergence Capital and

Searchandise Commerce, an online media network for product manufacturers and their retail channel partners, has raised $7 million in second-round funding. Madrona Venture Group led the round, and was joined by return backers Capital Partners LLC, DFJ Gotham Partners, Draper Associates, Inflection Point Ventures, Milestone Venture Partners and Wheatley Partners. The company previously raised $7.5 million.

Allylix, a San Diego-based developer of a green chemical platform, has raised $3 million in new Series C funding. The round is not closed with a total of $9 million. Middleland Capital was joined by return backers Blue Grass Angels, Life Science Angels, Tech Coast Angels, Pasadena Angels and Tate & Lyle Ventures.

Marketbright, a San Bruno, Calif.-based provider of an on-demand marketing automation platform, has raised an undisclosed amount of strategic funding from CDC Software Corp. (Nasdaq: CDCS). It previously raised funding from Greycroft Partners and Knight’s Bridge Capital Partners co-led the round.

Buyouts Deals

Blackstreet Capital Partners has acquired a controlling interest in Western Capital Resources Inc. (OTC BB: WCRS), an operator of 55 cash advance locations in the Midwestern U.S. and 34 prepaid wireless outlets. No financial terms were disclosed.

Advantage Capital Partners has committed an undisclosed amount of capital to Grameen America, a nonprofit microfinance organization focused on those living below the poverty line in the United States.

Lubrizol (NYSE: LZ) has joined the bidding process for German additives group Cognis, which is being sold by Permira and Goldman Sachs Capital Partners for approximately €3 billion.

Silver Lake Partners has acquired a 60% stake in payment processing company Mercury Payment Systems, for an undisclosed amount.

A Taiwan regulator said that the involved parties must resolve an snag in The Carlyle Group’s $1 billion deal for a minority stake in Taiwan Mobile. The transaction is being held up because of rules related to state ownership of media bodies.

PE-Backed IPOs

Deutsche Bank AG lost its spot as an underwriter for an IPO of PE-backed Dutch semiconductor company NXP, after refusing to renew a line of credit for the company.

Kingtone Wireless, a China-based company focused on “wirelessly enabling businesses and government agencies to more efficiently manage their operations,” has filed for a $30 million IPO. It plans to trade on the Nasdaq under ticker symbol KONE, with Roth Capital Partners serving as lead underwriter. The company reports $11.24 million in revenue for the year ending Nov. 30, 2009, compared to $4.28 million for the year-earlier period. Shenzhen Capital holds a 10.6% pre-IPO stake.

PE-Backed M&A

Iron Data, an Atlanta-based portfolio company of Thompson Street Capital Partners, has acquired CAVU Corp., a Raleigh, N.C.-based provider of regulatory software for government agencies in North America. No financial terms were disclosed.

Human Resources

Liad Agmon has joined Bessemer Venture Partners as an Israel-based entrepreneur-in-residence. He previously was VP of new services and general manager of social commerce for Sears Holdings.

Element Partners, a cleantech-focused VC firm, has named Sujit Banerjee as a managing director. He had joined the firm last year as a part-time operating partner. He is a former partner with BlueRun Ventures.

Tom Prior has joined the Silverfern Group as a managing director of merchant banking. He previously was a senior managing direc! tor with Deutsche Bank’s financial sponsors group in New York.

Rob Glassman has joined Bank of America Merrill Lynch as a managing director of healthcare banking. He previously was a partner with Orbimed Advisors.