peHUB Wire: Wednesday, June 3, 2009

*** NY Kickback Scandal Update: Seems David Loglisci told ethics overseers in 2003 that he had relinquished his financial ties to Chooch, the film he is accused of shaking down PE pros to help finance. This revelation is being portrayed as a hindrance to Cuomo and the SEC’s case against Loglisci, but to me it reads like just a minor complication.

Even if David Loglisci wasn’t directly benefitting from Chooch, his brother still was (original investment was a family partnership) — and people have been known to help out immediate family members from time to time. Unless, of course, there is evidence that David Leuschen and Saul Meyer also were pals of the brother…

*** In an interview with CNBC last month, NYC Comptroller/mayoral candidate William Thompson said the following:

“In some cases,[placement agents] aredoing everything from the doing the PPM toalmost the presentations to helping market around the country. Because a lot of theseprivate equityfunds, particularly the smaller ones and the mid-sized ones don’t have marketing sides, don’t know how to reach out. So in some instances, you could say it helps. We’re just going to beef up our staffs and work alonewith our outside consultantto try to create better access.”

For the record, Thompson’s office has yet to publicly post any new job openings related to private equity on its website. I called his press office yesterday to find out if/when the “beefing” might occur, but no answer yet (just told I should hopefully get a reply later this morning).

*** Before leaving for vacation, we reported that Prism VentureWorks had suspended efforts to raise its $275 million-targeted sixth fund. As an update, Prism has since downsized its back-office, which includes the departure of firm CFO Joe Pignato.

*** Jan-Daniel Neumann has quietly left General Atlantic, where he had been a principal in the firm’s German office. Beginning next month, he will join Germany-based Brockhaus Private Equity as a managing director. Brockhaus manages around €175 million.

*** GTCRhas committed $150 million to form a Canadian seismic data licensing platform, which will be run by former Pulse Data chief Ken MacDonald. This is a typical deal for GTCR, which makes me wonder if the firm is really closer in ideology to venture capital than to leveraged buyouts.

After all, GTCR basically identifies a market opportunity and an industry vet (or group of vets) who it believes can build a great company within that sector. Yes, that growth will be mostly based on acquisitions rather than on in-house technical innovation, but it’s still betting on a team, a biz plan and a dream.

*** Chicago Shindig? Just realized I’m in Chicago in two weeks from today, for the Buyouts Chicago event. Kind of want to host a get-together the night before, but would need one or two last-minute sponsors. Anyone interested? If so, email me.

*** Correction: While discussing the wind-down of Proficiency Inc. in yesterday’s column, I incorrectly included Ticonderoga Capital among the firm’s investors. It did not invest. Mistake was based on a database error that conflated Concord Ventures (a Proficiency backer) with Concord Partners III, an old Dillon Read fund that Ticonderoga took over and is managing out. Totally different entities.

Top Three

Intuit Inc. (Nasdaq: INTU) has agreed to acquire PayCycle Inc., a Palo Alto, Calif.-based provider of online payroll services, for approximately $170 million in cash. PayCycle had raised nearly $30 million in VC funding since 2000, from firms like August Capital, CCP Equity Partners, DCM, Irwin Ventures and Total Technology Ventures. PayCycle was advised on the sale by Raymond James & Associates.

Technitrol Inc. (NYSE: TNL) has agreed to sell its Denmark-based Medtech components business to Altor Equity for $200 million. The business generated $110 million in revenue last year, and includes the balanced armature receivers, high-end microphones and electromechanical devices for the hearing aid, high-end audio headset and medical device markets.

Consolidated Bedding Inc., the maker of Spring Air mattresses, has filed for Chapter 7 bankruptcy protection. It also has sold many of its assets, including its brand name and IP, to E&E Bedding Co. Consolidated Bedding is a portfolio company of H.I.G. Capital. As peHUB first reported last month, the company had engaged in advanced talks to sell itself to The Riverside Co., but the discussions broke down.

VC Deals

Grab Networks, a Dulles, Va.-based provider of online video management software, has raised $12 million in venture debt and equity funding. Horizon Technology Finance led the debt portion, while the equity came from insiders like Softbank Capital, SCP Capital, Longworth Venture Partners and Court Square Partners. Grab was formed last September via the merger of Anystream and Voxant.

Peer39, an online ad marketplace operator, has raised $10.5 million in Series C funding. Evergreen Venture Partners led the round, and was joined by return backers Canaan Partners, Dawntreader Ventures, Silicon Valley Bank and JPMorgan Chase. Peer39 previously raised around $11.2 million.

beeTV, a Milan, Italy-based develoer of a televised personal content channel, has raised $8 million in Series B funding led by Innogest.

LifeBond, an Israel-based developer of biosurgery devices, has raised $8 million in Series B funding. Pitango Venture Capital led the round, and was joined by return backers GlenRock Israel and The Zitelman Group.

Agilence Inc., a Camden, N.J.-based provider of video analysis solutions, has raised an undisclosed amount of Series B funding from Schneider Electric Ventures.

Turbine Air Systems Inc., a Houston, Texas-based maker of packaged cooling and energy systems, has raised an undisclosed amount of growth equity funding. Backers include Element Partners, NGP Energy Technology Partners, Robeco, Credit Suisse and Potomac Energy Fund. According to a March 31 regulatory filing, Turbine Air had called down $15 million of a $50 million equity round.

Buyout Deals

Ahlsell, a Swedish heating and plumbing parts supplier, is asking its lenders to relax loan covenants. The company was acquired in 2006 by Cinven and GS Capital Partners.

American Industrial Partners has agreed to buy the motor home business of Fleetwood Enterprises Inc. (OTC BB: FLTWQ). The deal is valued at $53 million, with assumed liabilities not to exceed $18 million. Greenhill & Co. is running the sale process, which is subject to U.S. Bankruptcy Court approval. Fleetwood shareholders include Tennenbaum Capital Partners.

Bain Capital has entered into exclusive talks to acquire a 20% stake in Chinese home electronics retailer GOME (HK: 0493), for approximately HK$3 billion (US$387m). Other suitors had included KKR and Warburg Pincus.

Cherry Automobile Co. of China has sold a 20% ownership stake to local private equity firms like Bohai Industrial Investment Fund Management and CDH Investments, according to The Wall Street Journal. The deal is worth around 2 billion yuan ($293m).

CrossHarbour Capital has received U.S. bankruptcy court approval for its acquisition of the Yellowstone Mountain Club golf and ski resort. The deal includes $35 million in equity and the assumption of $80 million in debt.

GTCR has committed $150 million in equity to support the formation of ReSurge Ltd., a Calgary, Alberta-based seismic data licensing company based in Western Canada. The company will be run by Ken MacDonald, former president and CEO of Pulse Data Inc. (TSX: PSD).

Temasek Holdings and Pacific Century Group may join an investor consortium that is in exclusive talks to buy AIG’s asset management unit. The group already includes Franklin Resources and Crestview Partners.

TPH Partners, the private equity arm of Tudor, Pickering, Holt & Co., has formed BlueRock Energy Capital II, a financing company for small, independent energy exploration and production operators. No financial terms of the commitment were disclosed, except that BlueRock will provide between $1 million and $10 million to companies for acquisition and development efforts.

PE-Backed IPOs

Medidata Solutions Inc., a New York-based provider of electronic data capture and data management software for clinical researchers, has set its IPO terms to 6.3 million common shares being offered at between $11 and $13 per share. It would have an initial market cap of around $290 million, were it to price at the high end of its range. Medidata plans to trade on the Nasdaq under ticker symbol MDSO, with Citi and Credit Suisse serving as co-lead underwriters. The company has raised over $21 million in VC funding since 2002, from firms like Insight Venture Partners (33.9% pre-IPO stake), Milestone Venture Partners (7.6%), Stonehenge Capital Fund (6.1%) and Globalnet Partners. www.mdsol.com

PE-Backed M&A

Andrews International, a Valencia, Calif.-based provider of private security and risk mitigation services, has acquired the U.S. and Mexico guarding operations of Garda World Security Corp. (TSX:GW) for US$44.25 million. Andrews is a portfolio company of Audax Group.

Lithium Technologies, an Emeryville, Calif.-based provider of on-demand solutions for enterprise communities, has acquired Keibi Technologies Inc., a San Francisco-based provider of automated content discovery, analysis and moderation for online communities. No financial terms were disclosed. Lithium has raised $21 million in VC funding from Benchmark Capital, Emergence Capital and Shasta Ventures. Keibi had raised around $9 million from firms like Catamount Ventures and Hunt Ventures.

PE Exits

GlaxoSmithKline has received U.S. antitrust approval for its $3.6 billion acquisition of Stiefel Laboratories Inc., a Coral Gables, Fla.-based skincare pharmaceutical company that is partially owned by The Blackstone Group.

Medtronic Inc. (NYSE: MDT) has acquired substantially all the glucose monitoring assets from PreciSense AS of Denmark. No financial terms were disclosed. PreciSense has raised a small amount of VC funding from firms like Novo AS and the Danish Growth Fund.

Skyworks Solutions Inc. (Nasdaq: SWKS) has acquired Axiom Microdevices Inc., an Irvine, Calif.-based provider of metal oxide semiconductor power amplifiers. No financial terms were disclosed. Axiom Microdevices had raised nearly $44 million in VC funding from firms like Tallwood Venture Capital, U.S. Venture Partners, Anthem Venture Partners and VentureTech Alliance.

Firms & Funds

Morgan Keegan & Co. has acquired The Spectrum Capital Group, and incorporated it into its investment banking group. Michael Lederman, Spectrum’s managing partner, has been named head of Morgan Keegan’s new special situations group.

Human Resources

Gary Chan has taken a sabbatical leave from his job as head of UBS AG’s private equity coverage group in Japan.

Christopher Mize and Aaron Hoover have joined Greenhill & Co. as managing directors focused on the energy sector. They will work out of a new Greenhill office in Houston, Texas, and previously were with Merrill Lynch.