No time to write a full column this morning, due to a cavalcade of news. Kind of forgot that today is effectively a Tuesday, which is normally the week’s busiest day in terms of press releases (and thus my earliest wakeup).
But before leaving you to links, I want to draw your attention to a document that was released yesterday by the Institutional Limited Partner Association (ILPA). It lays out a “set of best practices to address important issues relating to the alignment of interest between general partners and limited partners, fund governance and providing greater transparency to investors.”
You can read and download the document here, and I’m hoping you might send me your feedback. Not only on the substance of the proposal, but also on if the guidelines will actually make a whit of tangible difference.
My gut take is twofold:
(a) I concur with a majority of what! ILPA has proposed. Probably not surprising, since my demonstrated bias is typically toward LPs. For example, ILPA believes that 100% of fees (monitoring, exit, transaction, advisory) should accrue to the fund, rather than be split with the GP. I do have some quibbles – don’t believe supermajority of LPs should be able to terminate investment period without cause – but far more agreement than disagreement.
(b) I am severely skeptical that any of it will matter. It’s nice to get some best practices down on paper, but there is little reason for GPs to pay much attention. Sure ILPA has a large membership (despite its exclusion of funds-of-funds), but the members are not pledging to reject GPs who don’t follow the guidelines. Reminds me of the PEIGG valuation guidelines proposed years ago, when the LP co-authors admitted that they’d invest in a “hot” fund that didn’t comply. Same thing will go here. Just look at what happened yesterday with KPS Capital Partners, which ha! s a 50/50 fee split…
*** Hmmm. Seems that I wrote some semblance of an actual column. Feeling semi-productive.
*** Remember that there are just three days left to get early-bird tickets to our Boston cleantech evening, which is taking place on October 27. Agenda and registration here.
*** Happy anniversary J. Info on this evening should be arriving at your office shortly…
Top Three
The Blackstone Group has led a $780 million commitment to form Summit Materials, an acquisition platform in the building materials market. Other investors include Silverhawk Capital Partners and Charles Goodyear, former CEO of BHP Billiton. Summit Materials will be led by Tom Hill, former CEO of Oldcastle Inc., the U.S. unit of Irish building materials group CRH.
Riot Games, a Los Angeles-based online game publisher, has raised $8 million in second-round funding. Return backers Benchmark Capital and FirstMark Capital were joined by Tencent, a Chinese digital goods provider that operates an online gaming business. Riot Games previously raised $7 million.
A123 Systems, a Watertown, Mass.-based maker of lithium-ion batteries, has set its proposed IPO terms to 25.68 million common shares being offered at between $8.50 and $9.50 per share. It would have an initial market cap of approximately $954 million, were it to price at the high end of its range. It plans to trade on the Nasdaq under ticker symbol AONE, with Morgan Stanley and Goldman Sachs serving as co-lead underwriters. A123has raised over $300 million in VC funding, from firms like North Bridge Ventures Partners (12.% pre-IPO stake), General Electric (11.7%! ), Qualcomm (7.6%), Motorola (6.9%), Procter & Gamble, Alliance Capital, Sequoia Capital, CMEA Capital, FA Technology Ventures, OnPoint, Carruth Management and MIT. www.a123systems.com
VC Deals
VeriVue, a Westwood, Mass.-based provider of IP video distribution and delivery solutions, has raised $20 million in third-round funding, according to a regulatory filing. VentureWire reports that Sigma Partners led the round. VeriVue previously raised $65 million, from firms like Comcast Interactive Capital, Accel Partners, Arris Group, North Bridge Venture Partners, Matrix Partners and Spark Capital. www.verivue.com
Cell Biosciences, a Palo Alto, Calif.-based provider of nanoproteomic analysis systems to life science researchers, has agreed to acquire Alpha Innotech Corp. (OTC BB: APNO). The deal is va! lued at approximately $17.9 million in cash, or $1.50 per Innotech share. Cell Biosciences also announced that it has raised $19 million in new capital, via a second tranche of Series C funding and a Series D round. This brings its total funding to around $60 million, from firms like The Wellcome Trust, Domain Associates, Latterell Venture Partners, Novo A/S, Mitsui Ventures, Royal Bank of Canada and The Vertical Group. Alpha Innotech still lists several VC shareholders, following its 2005 reverse merger with Xtrana. They include BioAsia Management Investment and ETP/FBR Venture Capital.
Hara, a Redwood City, Calif.-based provider of on-demand environmental and energy management software, has raised $14 million in Series B funding. Jafco Ventures led the round, and was joined ! by Nth Power and return backer Kleiner Perkins Caufield & Byers. H ara had previously raised $6 million.
Blade Network Technologies Inc., a Santa Clara, Calif.-based provider of data center networking, has raised $10 million in Series B funding. NEC Corp., Juniper Networks and an undisclosed “technology industry leader” were joined by return backer Garnett & Helfrich.
Jobvite, a San Francisco-based provider of on-demand recruitment solutions, has raised $8.25 million in Series B funding. ATA Ventures led the round, and was joined by return backer CMEA Capital. Jobvite previously raised $7.2 million.
EverNote Corp., a Sunnyvale, Calif.-based provider of information capturing technologies, has raised ! $2 million in additional second-round funding from DoCoMo Capital. The round now stands at $6.5 million, including a previously-announced investment from Troika Dialog of Russia.
Buyouts Deals
Bertelsmann Music Group and KKR have received European Union approval for a previously-announced joint venture in the music rights space.
Lone Star Funds has been unable to secure creditor approval for its planned acquisition of failed Japanese REIT New City Residence Investment Corp., for the second time. The block could lead to the REIT’s liquidation, although another REIT says that it would step in as a new investor.
Sentinel Capital Partners has invested an undisclosed amount in Precision Pipeline Solutions LLC, in partnership with company management. PPS is a Newburgh, N.Y.-based provider of technical services thathelp utilities to maintain and operate their natural gas and electric infrastructure.
Sun-Times Media Group Inc., the bankrupt publisher of the Chicago Sun-Times, has named an investor group led by James Tyree as its stalking horse bidder. Tyree is former CEO of Mesirow Financial, and has offered $5 million in cash and the assumption of $20 million in liabilities.
Superior Capital Partners has acquired certain assets of Ann Arbor, Mich.-based National Archive Publishing Co. for an undiscl! osed amount. The assets are: XanEdu Publishing, a publisher of customized educational coursepacks for the higher education market; and NA Publishing, a provider of microform archiving of periodicals and journals for the library, higher education and healthcare markets.
PE-Backed IPOs
Tivit, a Brazilian technology consultant, has filed to raise up to $430 million in an IPO on the Sao Paulo exchange. Patria Investimentos holds a 12.4% stake in the company.
PE Exits
IncentOne, a Lyndhurst, N.J.-based provider of incentive solutions in the healthcare and green energy spaces, has sold its performance and loyalty business to Augeo Incent, a subsidiary of Augeo Affinity Marketing. No financial terms were disclosed. IncentOne last year raised an undisclosed amount of equity funding from Camden Partners.
RightNow (Nasdaq: RNOW) has agreed to acquire HiveLive Inc., a Boulder, Colo.-based provider of an enterprise social software platform, for approximately $6 million in cash. HiveLive raised $5.6 million in first-round funding in early 2008 from Grotech Capital Group.
Sithe Global Power LLC, a platform acquisition company owned by The Blackstone Group and Reservoir Capital, has sold a 50% int! erest in its Goreway Station, an 875MW combined cycle power generating facility in Brampton, Ontario. The buyers werewholly-owned subsidiaries of Chubu Electric Power Company and Toyota Tsusho Corp. No financial terms were disclosed.
PE-Backed M&A
Apache Design Solutions, a Mountain View, Calif.-based provider of power and noise integrity solutions for chip-package-systems convergence, has acquired the assets of Sunnyvale, Calif.-based Sequence Design. No financial terms were disclosed. Apache Design has raised a small amount of VC funding from Intel Capital and PacRim Capital Management. Sequence Design had raised around $66 million, including a 2005 recap. Backers include Focus Ventures, First Plaza Group,Lake Street Capitaland Performance Equity Management.
Roamware, a San Jose, Calif.-based provider of roaming solutions for mobile communications, has acquired Macalla Inc., a provider of mobile financial services solutions for mobile banking. No financial terms were disclosed. Roamware has raised over $64 million in VC funding, from firms like DCM-Doll Capital M! anagement, Accretive Technology Partners, Shelter Capital Partners and T-Mobile Venture Fund.
Quest Specialty Chemicals Inc., a chemical acquisition platform of Huron Capital Partners,has acquired Custom Finishes Inc., a Brighton, Tenn.-based maker of custom-matched aerosol spray paints, brush cap bottled paints, vinyl and carpet dyes and camouflage paints. No financial terms were disclosed.
Human Resources
Shweta Jalan has joined Advent International as an India-based director. She previously was a director with ICICI Venture in Mumbai.
Harvard Business School has named four entrepreneurs-in-residence, as part of an annual program that asks “accomplished entrepreneurs to commit to either a semester or full academic year, depending on their schedule, of working with faculty and students.” They are: Jeff Bussgang, a partner with Flybridge Capital Partners; Jeff Walker, former chairman and CEO of CCMP Capital Partners; Susan Decker, former president of Yahoo; and Jim Sharpe, formerpresident of Extrusion Technology (recently sold to RFE Investment Partners).
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