peHUB Wire: Wednesday, May 12, 2010

Some assorted notes as I bask in the Celtics’ glory and sulk at Lost’s disappointing mythology episode:

*** The Blackstone Group plans to close its latest mega-fund by the end of next month with around $12 billion, according to multiple sources.

The vehicle was originally pitched with a $20 billion target in October 2007, and then later downsized to $15 billion. For nearly the past year, it’s been stuck at around the $9 billion mark.

The $12 billion figure isn’t definitive, since there still are a bunch of potential LP commitments that need to be hard circled. But it should be pretty close. My initial thoughts were twofold: (1) That’s still a pretty good raise given fundraising market conditions, and (2) It means Blackstone will need to club up for those $10 billion+ mega-deals it likes to do (more Fidelity Nationals, fewer Hiltons).

On that second point, however, it’s worth noting that Blackstone and other mega-LBO firms wi! ll once again tap limited partners for big co-investments. And, from what I hear, LPs may be willing to once again participate (particularly those with co-invest allocations that have been mostly untouched for the past 18 months).

Probably helps that recent Q1 mega-buyout marks look particularly healthy, in part due to recent FAS 157-enabled valuation bumps (as opposed to smaller buyout portfolio companies, which often stayed marked-to-cost due to a lack of public comps). For example, Blackstone told people at last week’s annual meeting that Freescale could produce a 2x return. Pretty amazing for a portfolio company that most folks had written off…

*** Tullis Health Investors (fka Tullis-Dickerson) last week informed limited partners that Tom Dickerson and Joan Neuscheler had resigned as general partners of the firm’s second and third funds.

The firm confirmed the resignations in a brief statement, which added that “Both had previousl! y indicated in January 2008 that they would not participate in future Tullis-Dickerson funds and had resigned from Tullis-Dickerson & Co., Inc. in January 2009 and September 2008, respectively.”

But here’s what’s a bit odd: Tullis-Dickerson told LPs that the resignations triggered a key-man fund suspension, and told me that both funds are “in wind-up mode and not making new investments.” Ok but, if so, why wait until now to announce the resignations? Wouldn’t the keyman clauses have been triggered more than a year ago?

The firm says it will have no further comment, but I’ll keep trying…

*** Craig Cooper, a veteran VC and co-founder of Boost Mobile, has stepped down as head of Saban Ventures, where he’ll remain on board in an advisory role. His LinkedIn profile lists his current role a managing partner of something called Cooper Capital Partners, although it’s unclear if that’s a real firm or just a personal investment vehicle. You can read more here.

*** Lots of reports circulating about ! possible bidders for Newsweek, including my very own corporate overlords. But before you go thinking that yours truly could find his byline in the mag, it’s worth noting that Thomson Reuters could have a rival that isn’t necessarily my biggest fan.

Newsweek editor Jon Meacham recently said he might be interested in putting together a bid of his own, and reportedly had lunch on Tuesday with former Quadrangle Group chief (and ex-NYT reporter) Steven Rattner. That’s ok. All I hope for now is that Thomson Reuters and Rattner aren’t somehow working together…

Top Three

Transurban Group (AX: TCL), an Australian toll road operator, has rejected an A$7.2 billion buyout offer from the Ontario Teachers’ Pension Plan and the Canadian Pension Plan Investment Board.

Solaria Inc., a Fremont, Calif.-based developer of photovoltaic module production solutions, has raised $45 million in Series D funding. CMEA Capital and DBL Investors co-led the round, and wer! e joined by Mitsui Ventures, Savitr Capital and return backers Sigma Partners and NGEN Partners. The company previously raised around $72 million.

John Lilly is stepping down as head of Mozilla in order to become a venture partner with Greylock. He took over at the open-source software ! nonprofit in early 2008, after having previously served as its chief o perating offiver. Lilly would become Greylock’s third venture partner, joining Tom Bogan (chairman of Citrix) and Charles Chi (former VP of marketing for Ciena Corp.).

VC Deals

Exosome Diagnostics Inc., a New York-based developer of minimally-invasive molecular diagnostics, has raised $20 million in Series A funding. NGN Capital and Forbion Capital Partners co-led the round.

Sand 9, a Cambridge, Mass.-based maker of timing oscillator and frequency control technology for the wireless device market, has raised $12 million in Series B funding. Commonwealth Capital Ventures led the round, and was joined by return backers Flybridge Capital Partners, General Ca! talyst Partners and Khosla Ventures. Sand 9 previously raised $8 million., a Los Angeles-based provider of in-stream advertising on Twitter, has raised $5 million in new VC funding from GRP Partners, Greycroft Partners and LowerMyBills founder Matt Coffin.

Sidense, a Canadian developer of IP for the non-volatile memory market, has raised C$5 million in Series B funding. VentureLink Funds led the round, and was joined by return backers Tech Capital Partners, Trellis Capital and Vertex Venture Capital. The company previously raised US$6 million.

General Compression Inc., a Newton, Mass.-based developer of compressed air energy storage system! s, has raised $3 million in new venture capital from a fund managed by Northwater Capital Management. It previously raised $17.9 million from US Renewables Group and Duke Energy.

Buyouts Deals

Goldman Sachs reportedly is nearing a deal to buy AXA’s 15.6% stake in Chinese life insurer Taiking Life, which is currently valued just north of $1 billion.

Hellman & Friedman is in talks to acquire a minority stake in Italian asset manager Banca Fideuram from Intesa Sanpaolo SpA (Milan: ISP). The position could be for between 5% and 15%, with Banca Fideuram believed to be worth around €3 billion.

HgCapital has agreed to acquire Frösunda LSS AB, a Swedish provider of specialist disability care, from Dutch private equity firm Polaris. No financial terms were disclosed.

Summit Partners has made a minority equity investment in OB Hospitalist Group Inc., a provider of Ob/Gyn hospitalist services to hospitals across the United States. No financial terms were disclosed.

Terra Firma Capital Partners raised £105 million pounds to stave off default on portfolio company EMI Group, according to The Wall Street Journal.

Waud Capital Partners has sold Hospitalists Management Group to AEA Investors for an undisclosed amount. Waud acquired a majority stake in the company in 2006.

PE-Backed IPOs

Niska Gas Storage, a Gridley, Calif.-based owner and operator of natural gas storage assets in North America, raised $358.75 million in its IPO. The company priced 17.5 million shares at $20.50 per share, compared to a $20-$22 per share range. It will trade on the NYSE under ticker symbol NKA. The Carlyle/Riverstone Global Power and Energy Fund acquired Niska Gas Storage in 2006 from EnCana Corp.

PE Exits

ABC Supply Co. Inc. has agreed to acquire building supply company Bradco Supply Co. from Advent International for an undisclosed amount.

Bridgeline Digital Inc. has acquired select assets of TMX Interactive Inc., a Conshohocken, Penn.-based interactive technology provider, for $1.7 million. TMX had raised nearly $23 million in VC funding, from firms like Syncom Ventures and Ben Franklin Technology Partners.

Ergonex Pharma GmbH, a German drug developer backed by VC firm High Tech Beteiligungen, has agreed to sell Terguride, a potential treatment for pulmonary arterial hypertension, to Pfizer Inc. (NYSE: PFE). The deal is structured with milestone payments, although financial terms were not disclosed.

InfoSpace Inc. (Nasdaq: INSP) has acquired the assets of San Francisco-based online retailer Mercantila Inc. The deal is valued at $8 million in cash, plus the assumption of up to $5.9 million in liabilities. Mercantila has raised around $27 million in VC funding, most of which came from Lightspeed Venture Partners.

PE-Backed M&A

Delivery Agent Inc., a San Francisco-based provider of shopping-enabled programming and content monetization for entertainment properties, has acquired interactive media agency The Band. No financial terms were disclosed. Delivery Agent has raised $60 million in VC funding from Focus Ventures, T-Venture, Coral Group, Ironwood Capital, Bessemer Venture Partners, Worldview Technology Partners and Cardinal Venture Capital.

Firms & Funds

Headwaters MB has raised $75 million for its second fund, which will invest between $10 million and $20 million into mid-market companies in “capital constrained” situations.

Human Resources

Ian Davis has joined Apax Partners as a senior advisor. He currently is a senior partner with McKinsey & Co., where he previously was a worldwide managing director. He also is a non-executive director of BP PLC.

Walt Holzer has joined Kirkland & Ellis as a Chicago-based partner focused on private equity funds and portfolio companies. He previously led the Chicago private equity practice for Jones Day.

Frank Rimalovski is stepping down as a partner with New Venture Partners, in order to help launch a new seed investment fund for startups spinning out of ! New York University.

Ashish Patel has joined anti-virus software maker AVG Technologies as senior VP of corporate development. He previously was with Intel Capital and, before that, with private equity firm Actis.