Private Equity Week Wire for Tuesday 8-14

SAN FRANCISCO, CA ? The Shansby Group, a leading private equity investment group specializing in consumer products businesses, announced today that Alexander S. Panos has rejoined the firm as a Vice President. Mr. Panos most recently was a Vice President in the Corporate Finance Department of Robertson Stephens, Inc., an investment banking firm, where he specialized in consumer products companies. He left The Shansby Group in March 2000 to help co-found a software company, Syllexis Networks.LA JOLLA, CALIF. — Graviton, Inc., a developer of wirelesssensory information networks, announced today the completion of a Series DPreferred Stock offering totaling $35 million, exceeding the company’soriginal target for the round. The round was led by Merrill Lynch. Royal Dutch/Shell, Motorola,Inc. and Global Crossing also became investors, joining Mitsui, Omron,Qualcomm, Siemens and Sun Microsystems. In addition to Merrill Lynch,Graviton’s primary financial investors include venture capital firms KleinerPerkins Caufield & Byers and Earlybird.NEW YORK — Harris & Harris Group, Inc. announced today that it has invested $490,000 in a Series A Convertible Preferred security in Nantero, Inc., a company developing advanced semiconductors using nanotechnology. Harris & Harris Group is a publicly traded venture capital company organized as a Business Development Company. Harris & Harris Group has 9,064,231 common shares issued and outstanding.WESTBOROUGH, MASS. — NEON Communications, Inc. (Nasdaq:NOPT) and Exelon Enterprises Management, Inc. (EMI) announced today the closing of an agreement under which EMI has provided $11.5 million of additional financing in the form of a convertible note. NEON plans to use this capital to selectively expand and enhance NEON’s fiber optic network and to meet other working capital needs. EMI is the operational affiliate of Exelon Corporation’s (NYSE-EXC) Capital Partners subsidiary and one of NEON’s major shareholders. EMI and NEON have executed a purchase agreement for $11.5 million in the form of 18% convertible, subordinated notes due in August 2008. EMI may convert the notes at any time into NEON common stock at a conversion price of $5.00 per share or 2.3 million shares, subject to certain anti-dilution provisions. EMI already owns 2.1 million shares of NEON’s common stock.SEATTLE — Isilon Systems, a developer of high-performance distributed storage systems optimized for the rich-media content delivery and hosting market, today announced the closing of an $8.4 million Series A funding round with investments from Atlas Venture and Madrona Venture Group. Funds will be used to complete development and launch its patent-pending distributed file storage products.Isilon Systems combines its innovative, patent-pending distributed file system technology with off-the-shelf hardware to build massively scalable, highly available and cost-effective distributed storage systems designed specifically to meet the rapidly expanding needs of the rich-media content delivery and hosting market.WASHINGTON –The World Resources Institute (WRI) announced today the successful completion by an international group of investors of an innovative $1 million financial package for Noram de Mexico, SA de CV, Mexico’s primary producer of high-quality charcoal from sustainably managed forests. Noram de Mexico is one of only three companies worldwide that sell sustainably produced hardwood charcoal certified by the Forest Stewardship Council (FSC). The company won first prize at last year’s New Ventures Investor Forum, an annual WRI gathering which attracts hundreds of venture capitalists, investment bankers, and entrepreneurs in Latin America.PALO ALTO, CALIF. — Norwest Venture Partners, the premier venture capital business partner for emerging growth IT companies, today announced a $3.8 million investment in CrossWeave, Inc., provider of an innovative internet infrastructure software platform that automates e-business interactions. CrossWeave closes its $8.1 million Series B equity round bringing the total amount of equity financing issued, raised and committed to $11.2 million since the company’s inception in May 2000. The Series B round was led by Norwest and included investments from Series A investors, Sutter Hill Ventures and Redpoint Ventures. CrossWeave will use the funds to extend the development of its platform and expand its sales and marketing efforts. Venkat Mohan, venture partner with Norwest Venture Partners, will join the company’s board of directors.REHOVOT, ISRAEL — OrSense Ltd., a privately-held medical device company, has announced the completion of an $8.2 million Venture Capital financing round. The financing was led by STAR Ventures and Israel Health Care Ventures. Also participating in the round were investment groups from the US, UK and Israel. In addition to this financing round, the company was also awarded a grant of $1.2 million ($2.4 million project with 50% self participation) by the Office of the Chief Scientist of the Israeli Ministry of Trade and Industry, for promising research and development activity. OrSense’s proprietary technology, known as “Occlusion Spectroscopy(TM)” is designed to non-invasively measure multiple and vital blood parameters such as glucose, hemoglobin, cholesterol and others. The innovative electro-optical technology performs non-invasive blood measurements by means of a finger probe, eliminating the need to draw blood by needle-stick. The company is developing a non-invasive glucose monitor geared for daily use by diabetics who must frequently monitor their blood glucose by means of an invasive fingerstick test. There are an estimated 140 million people in the world who suffer from diabetes, including 16 million in the US (about 7% of the population). The glucose-monitoring market is forecasted to reach $3.5 billion in 2003, with an annual growth rate of 12-15%.PALO ALTO, CALIF. — WhiteLight Systems, the leading provider of next-generation analytic applications, announced today that it has obtained $7 million in financing from existing investors, including Warburg Pincus, Charter Venture Capital, and Dresdner Kleinwort Capital. Including this latest financing, the company has received over $42 million in funding. WhiteLight will use the new capital to support development and ongoing expansion of its sales efforts.LIVONIA, MICH. — McLaren Performance Technologies, Inc. (Nasdaq: MCLN) announced today that it has entered into a financial alliance with EMM Capital Management, LLC (248-614-3262), a Troy, Mich.-based merchant and investment bank. The anticipated equity infusion into McLaren Performance Technologies will be approximately $2 million. The Livonia, Mich.-based developer and manufacturer of high-performance automotive systems said EMM Capital Management, LLC (EMM) will support the capital requirements for McLaren as it continues to accelerate with improved financial performance and growth initiatives engineered by its new management team.BOSTON — Boston Ventures, a leading private equity firm focusing on the media, entertainment and communication industries, announced today that it signed an agreement to purchase the Cahners Travel Group from Cahners Business Information, a member of the Reed Elsevier plc group (NYSE: RUK and ENL). The Cahners Travel Group (“CTG”) is composed of worldwide directories, periodicals, and destination information guides which serve the travel and hospitality industry. CTG’s seven directories provide details on hotels, cruise lines and ships, meeting and convention properties, and business travel in the United States and internationally. The directories include Hotel Travel Index, Official Hotel Guide, Official Meetings Guide, Official Meetings Facilities Guide, Official Meetings Facilities Guide – International, Official Cruise Guide, and Business Travel Planner. CTG’s three periodicals provide editorial coverage of the travel industry in general through Travel Weekly, the travel industry in the Western United States specifically through TravelAge West, and the meetings industry through Meetings and Conventions. In addition to its directories and editorial periodicals, CTG produces two information services called STAR Service and Weissman Travel Reports that provide information on numerous travel destinations, including countries, cities, and ports-of-call. It is expected that the deal will close in September.For yesterday’s Wire, click here