peHUB Wire: Wednesday, June 2, 2010

Some notes to kick off your Wednesday:

*** The NY Times reports today that the SEC is seeking to bar Steve Rattner from the securities biz for up to three years, for his connection to the New York pay-to-play scandal. It also says Rattner is “fiercely” resisting the suspension, as is his M.O.

What’s fascinating (to me) about all this is that Rattner still hasn’t been charged with anything. Not by the SEC nor by the New York AG’s Office.

Both previously sued Rattner’s former firm – Quadrangle Group – for actions taken while he was still a partner, effectively alleging that Rattner was the bad actor (Quadrangle has since settled).

Isn’t the next logical step a suit against Rattner himself? If not, why not? Cuomo may have given Rattner immunity from criminal prosecution (as reported), but not from civil prosecution. Is Rattner simply tougher to shake than Quadrangle, Carlyle Group, etc?

The onus is now on the SEC and Cuomo to either file charges or end this thing once and for all. Either charge him or let him move on. This middle-ground preening seems to be a waste of everybody’s time…

*** I ran into A123 Systems co-founder Ric Fulop at the Angel Bootcamp event in Boston. He confirmed that he’s joining North Bridge Venture Partners (his conference badge also confirmed it), but that he won’t begin until September.

*** Devin Matthews has joined Chicago Growth Partners as a partner, according to an email sent yesterday to colleagues and friends. He previously had been a managing director with Baird Venture Partners. In the email, Matthews wrote:

I started my private equity career with the CGP team over 15 years ago when we were all with William Blair Capital Partners and I am excited to be back working with my close friends as well as some great new colleagues.With! CGP, I will be investing in the same industries I always have – busin ess and consumer services – and in the same types of companies delivering technology-enabled services with recurring revenue and high margins.

*** VC Deal Scoop: Zift Solutions, a Raleigh, N.C.-based provider of SaaS that helps corporations create controlled marketing campaigns for channel partners, has raised $500,000 in seed funding from Southern Capitol Ventures. The round could be topped off at $1.5 million.

The company previously had been bootstrapped, and has secured customers like HP and Red Hat.

This sort of thing doesn’t normally make it into “the blue,” but I’ve been thinking a lot about North Carolina startups since returning from the VCIC Finals last month. Specifically, I’ve been thinking about the financing troubles they face.

Southern Capitol Ventures is an active firm in Research Triangle Park! , as is Intersouth Partners and NC Idea. After that, there really aren’t any local firms doing much local investing. Moreover, the lack of a nonstop flight from San Francisco to RDU puts even more financing pressure on local startups.

I talked about the situation a bit with Zift co-founder and CEO Ken Romley, who previously was president and CEO/CTO of local startup SmartPath (acquired by DoubleClick). “Getting talent around here is pretty easy, because of the strong academic institutions and the general lifestyle,” Romney explained. “But financing is definitely hard to come by because there are so few VCs here on the ground. You’d think there would be more, considering the number of young tech companies we have.”

Romley added that Zift’s financing round should take it to profitability sometime next year – it’s already been around three years thanks to bootstrapping – after which it may co! nsider a $5-$7m Series B round.

*** Where in the World: I’ll be heading into Boston shortly to attend the Super Returns US conference. Today is actually the “investor summit” part, and there’s a chance they won’t let me in (particularly if I don’t change out of this Red Sox jersey and into a suit). So if you’re there and I’m not, stop by the lobby and say hello. I’ll probably be the guy typing furiously on a laptop, with an iced coffee beside me…

Top Three

Authentic Brands Group has formed with a $250 million equity funding commitment from Leonard Green & Partners, Knight’s Bridge Capital Partners (unit of Council Corp.) and ABG chairman and CEO James Salter. The New York-based company will “acquire, manage and build long-term value in prominent consumer brands.”

HitecVision, a European private equity firm focused on the oil and gas sector, has raised $420 million for its “asset solutions” fund. The capital will be used to invest in the asset-based side of the international offshore oil and gas service industry. MVision served as placement agent.

Weijian Shan reportedly is stepping down as a China-based partner with TPG Capital, in order to launch his own Asia-focused fund. He will remain with TPG in a senior advisory role.

VC Deals

Altura Medical Inc., a San Clemente, Calif.-based maker of devices for treating abdominal aortic aneurysms, has raised $20 million in Series A funding. New Leaf Venture Partners led the round, and was joined by Advanced Technology Ventures and return backer SV Life Sciences.

Ablexis LLC, a San Francisco-based developer of a platform for antibody drug discovery, has raised $12 million in Series A funding. Third Rock Ventures led the round, and was joined by Pfizer Venture Investments.

DeviceVM, maker of the Splashtop rapid-start operating system, has raised $10 million in new funding led by SAP Ventures. The comp! any previously raised over $35 million from New Enterprise Associates, Ventures, DFJ Dragon, Tim Draper and Larry Augustin.

Transpera Inc., a Santa Monica, Calif.-based provider of a platform to monetize Web video on mobile phones, has raised $9 million in Series C funding. BlackBerry Partners Fund led the round, and was joined by return backers Flybridge Capital Partners, First Round Capital and Labrador Ventures.

Kudzu Interactive, an Atlanta-based operator of an online and mobile ordering and ecommerce solution for th! e casual dining takeout food market (, has raised $7 mi llion in Series B funding led by Norwest Venture Partners. The company previously raised $3 million.

Constellation Pharmaceuticals Inc., a Cambridge, Mass.-based developer of drugs that target selective regulators of epigenetic function, has raised $4.8 million in additional Series B funding led by S.R. One Ltd. The round is now closed at $22 million, including a $17.2 million first close announced last summer. Other backers include Altitude Life Science Ventures, Third Rock Ventures, The Column Group and Venrock. The company has raised a total of $54 million.

Buyouts Deals

Caballo Energy LLC has secured a private equity commitment from EnCap Investments. No financial terms were disclosed. Caballo is a Tulsa-based company formed acquire, develop and manage natural gas gathering, compression, treating, processing and marketing assets.

Genstar Capital has acquired Granite Global Solutions, a Canadian provider of risk mitigation services to the insurance and corporate markets. No financial terms were disclosed.

International Meal Company Holdings, a Brazilian retail food concessionaire and multi-brand casual dining chain, has raised over $100 million in new equity funding. British Columbia Investment Management Corp. and an undisclosed Asian investment management firm were joined on the deal by existing IMC controlling shareholder Advent International.

NBK Capital, an investment arm of the National Bank of Kuwait, has acquired a 30% stake in Turkey-based World Eye Hospital Group.

Oak Hill Cap ital Partners has completed its $570 million acquisition of Dave & Buster’s Inc., a Dallas-based interactive entertainment and restaurant chain, from Wellspring Capital Management.

The Riverside Co. has acquired NAKA & Co. Ltd., a Japanese maker of crystal oscillators and crystal units used for microwave backhaul equipment and base stations for mobile communications. No financial terms were disclosed.

Shackleton Equity Partners has acquired RTI Electronics Inc. from IntriCon Corp. (Nasda! q: IIN). No financial terms were disclosed. RTI makes thermistor, film capacitor and magnetic passive electronic components.

Tenet Healthcare Corp. (NYSE: THC) said it is in early talks to buy Australian hospital chain Healthscope Ltd. (AX: HSP), which also has received interest from several private equity firms.

PE-Backed IPOs

Chr. Hansen, a Danish food ingredients maker owned by PAI Partners, has a fully subscribed IPO, according to Reuters. The float was intended to raise the equivalent of $516 million.

Motricity Inc., a Durham, N.C.-based provider of mobile marketplace management solutions, has set its IPO terms to 6.75 million common shares being offered at between $14 and $16 per share. It would have an initial market cap of approximately $617 million, were it to price at the high end of its range. The company has raised over $365 million in VC funding, from Advanced Equities, Carl Icahn (21.12%), New Enterprise Associates, Technology Crossover Ventures, Massey-Burch Capital, Noro-Moseley Partners, Intel Capital, Qualcomm Ventures, Sienna Ventures, TriState Investment Group and Wakefield Group.

Porter Airlines, a regional Canadian carrier, has suspended its planned C$120 million IPO. Shareholders include EdgeStone Capital Partners, OMERS and GE Asset Management.

PE-Backed M&A

Wall Street Systems, a developer of financial trading and treasury engines, has acquired corporate treasury specialist City Financials. No financial terms were disclosed. Wall Street Systems is a portfolio company of Warburg Pincus.

PE Exits

BASF has agreed in principle to acquire German adhesives maker Cognis from current owners Permira and GS Capital Partners. The deal could be valued at more than $4 billion.

Google has acquired Invite Media, a Philadelphia-based company that analyzes advertising within social networks. All Things D broke the news, suggesting a price of around $70 million. Invite Media had raised a small amount of VC! funding from First Round Capital and Comcast Interactive Capital.

GSI Commerce Inc. (Nasdaq: GSIC) has acquired FetchBack Inc., a Tempe, Ariz.-based provider of re-targeting solutions for online advertisers. No financial terms were disclosed, although reports put the price-tag at around $40 million. FetchBack had raised VC funding from Metamorphic Ventures.

M/C Venture Partners has agreed to sell Fusepoint Inc., a provider of managed IT and colocation services to enterprises in Canada, to Savvis Inc. (Nasdaq: SVVS). The deal was valued at $124.5 million in cash.

Pfingsten Partners has sold Technical Service for Electronics, an Arlington, Minn.-based maker of e! ngineered interconnect solutions for the medical device industry, to < b>Amtek Inc. (NYSE: AME). No financial terms were disclosed.

Firms & Funds

Elbrus Capital has been launched as a new Russian private equity firm, following last year’s purchase of Renaissance Private Equity from Renaissance Group. The group still has around $160 million in legacy dry powder to invest. Its principals are: Dmitri Krukov, former managing partner of Renaissance Private Equity, Alexander Savin, former CEO of A1 Group, and Robert Thielen, founder and managing partner of Waterland Private Equity.

Flagship Ventures a Cambridge, Mass.-based VC firm focused on cleantech and life sciences opportunities, has begin raising its latest fund with a $300 million target, acco! rding to VentureWire. It already has secured a $20 million commitment from Mass PRIM. Flagship’s prior fund closed in 2007 with $235 million in capital commitments.

Global Environment Fund is raising $150 million for a private equity fund solely focused on sustainable forestry in sub-Saharan Africa. It already has secured a $50 million commitment from UK-based development finance group CDC.

Firms & Funds

Prateek Dhawan has joined Accel Partners as an India-based principal on the firm’s growth equity team. He previously was a VP with Goldman Sachs Investment Partners, where he led Indian investment activities.

Kelly Holman, a former reporter covering private equity for IDD and The Deal, has joined PR firm BackBay Communications as an account director.

J. Wayne Merck, former president and CEO of K2 Inc., has joined Angelo Gordon & Co. as a senior advisor to the firm’s private equity group. He also will serve on the board of portfolio company KEE Action Sports.

Peter Pham is stepping down as CEO of BillShrink, in order to become an entrepreneur-in-residence at Trinity Ventures (one of BillShrink’s investors).