PRIVATE EQUITY WEEK WIRE — Friday, December 13

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The Canadian Pension Plan Investment Board announced yesterday that it has expanded its public disclosure on its private equity fund investment activities. Last May, the CPP Investment Board began by posting on its web site information about private equity investing, including descriptions of all general partners to whom it has committed capital and how much is invested in each fund managed. It has now gone further by disclosing quarterly fund-by-fund information on the commitment and capital drawn, as well as the reported value by the fund manager and distributions received by the CPP Investment Board. To see the information, go to:

Diageo PLC has finally unloaded Burger King to a syndicate of private equity investors, but for a far lower price than what was originally offered. Earlier this year,Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners offered $2.26 illion for the fast food chain, but renegotiated last month down to a final sale price of approximately $1.5 billion.

DESA Holdings Corp., a Bowling Green, Ky.-based manufacturer and marketer of zone heating and specialty power tool products, today announced that the previously announced sale process for substantially all of the company’s operating assets has been successfully completed. The winning bidder was H.I.G. Capital, a Miami, Fla.-based private equity firm, which agreed to pay approximately $200 million for the offered assets.

Hicks, Muse, Tate & Furst Inc. announced that two of the firm’s principals, Joe Colonnetta and Andrew Rosen, have been promoted to the position of partner. Hicks Muse also announced the promotion of five of its investment professionals to principal: Marcos Clutterbuck, Robert Darwent, Edward Herring, Eric Lindberg and Luca Velussi. Colonnetta, Herring and Lindberg are based in the firm’s Dallas office; Rosen in New York; Darwent and Velussi in London; and Clutterbuck in Buenos Aires. Separately, HMTF announced that it will back Philippe von Stauffenberg, a principal in the firm’s London office, in forming a new investment affiliate.
The Golden LEAF Foundation has signed a letter of intent with BioVista Management to invest up to $30 million in a new venture capital fund investing in life sciences companies that provide or support jobs in North Carolina. The Golden LEAF investment is part of a $85.4 million economic stimulus package the Foundation announced in August.
The Deal is reporting that OVP Venture Partners has joined the growing list of venture capital firms that have decided to defer or waive fund management fees to offset future clawback liabilities. According to the story, OVP has waived all management fees on its $150 million 2000 fund, which means that the general partnership is giving up between $10 million to $15 million.
Seagate Technology Inc. (NYSE: STX), a buyout-backed company specializing in disk drive manufacturing, saw its stock price dip yesterday after pricing an $870 million initial public offering at $12 per share on Tuesday night. The stock closed its first day of trading yesterday at $11.52 per share, after falling as low as $11.25 during early morning trading. Seagate investors, who had originally hoped to raise $1 billion through the IPO, include Silver Lake Partners, Texas Pacific Group, JPMorgan Partners, August Capital and Integral Capital Partners. The private equity syndicate had taken Seagate private in an April 2000 deal valued at approximately $2 billion.

MedManage Systems, a Bothell, Wash.-based provider of online prescription drug sampling solutions, today announced the closing of $3.5 million in an ongoing round of Series B financing. Existing backers Prism Venture Partners and Tredegar Investments both participated, bringing total funding since inception to $16 million. MedManage will use the financing to launch a new Web-enabled drug sampling solution in the first quarter of 2003.

Optical Solutions Inc. a Minneapolis-based provider of fiber-optic communications systems for local access markets, today announced it has received funding from Intel Capital. This new investment from Intel Capital caps the company’s Series F financing, with a total $24 million raised in the round.
Renovis Inc., a venture-backed biopharmaceutical company based in San Francisco, has acquired the assets of Centaur Pharmaceuticals Inc., a venture-backed drug discovery company focused on neurogenerative diseases, stroke and inflammation. The deal represents a major valuation drop for Centaur, which will only receive $1.25 million in cash and up to 30% of Renovis stock in exchange for its assets. Following a $22 million funding round in 2000, the Santa Clara, Calif.-based company was valued at over $200 million by investors like Charter Venture Capital, MDS Health Ventures, Menlo Ventures and Ticonderoga Capital. Renovis has received approximately $47 million over two rounds of venture funding from such investors as Alta Partners, Bioveda Capital, Flagship Ventures, Skyline Ventures and Venrock Associates.

Jack Harrington will be joining Brentwood Capital Advisors as a principal, effective on Jan. 1. Harrington was formerly a vice president with Nelson Capital Corp., and currently sits on the boards of InfoPartners Inc. and Inphact Inc.
Castle Harlan Inc. announced today that its Australian affiliate had completed the purchase of Australian Pacific Paper Products (APPP) from DSG International Ltd. (Nasdaq: DSGIF) in a transaction valued at A$53 million. APPP, based in Melbourne, was founded in 1988 and is Australia’s second largest manufacturer and distributor of disposable diapers and adult incontinence products with annual sales of A$100 million. Equity for the acquisition was provided by the CHAMP I Funds, which are managed and advised by Sydney-based Castle Harlan Australian Mezzanine Partners Pty Ltd. and Castle Harlan. Westpac Banking Corp. underwrote the debt financing for the transaction.

Arsenal Capital Partners has acquired Printing Solutions Holdings LLC, a Chantilly, Va.-based provider of specialty back-office printing solutions. The transaction was funded by Arsenal, Printing Solutions management, and CapitalSource Finance LLC.

Investissement Desjardins has invested CA$1.5 million into LIPSO, a Montreal-based provider of mobile messaging technology.

Newisys Inc., an Austin, Texas-based provider of enterprise-class server designs, has raised $25 million in its second institutional round of venture capital funding, led by Fidelity Ventures, the venture capital arm of Fidelity Investments. All previous investors participated in this round, including New Enterprise Associates, Austin Ventures and AMD (NYSE:AMD).
 Stephen Friedman, former Goldman Sachs chief and current senior principal with MMC Capital, is President Bush?s choice to take over as White House economic advisor, following last week?s firing of Larry Lindsey. In addition to his work at MMC Capital, Friedman serves as a director of CIA-sponsored venture capital group In-Q-Tel, is a special limited partner with Insight Venture Partners and is on the board of deficit reduction advocate The Concord Coalition. That final association may prove problematic, as deficit reduction is not high among the Administration?s list of economic priorities.
 Chantry Networks, an Ontario-based developer of wireless local area network (WLAN) infrastructure, today announced that it secured a Series A follow-on investment of $3 million from Flagship Ventures, following an initial round of funding 4 months ago.
 OpSource Inc., a Santa Clara, Calif.-based IT infrastructure services company, announced $4.5 million in new funding from ComVentures.
 Wany Robotics, a France-based supplier of robotics technology solutions, today announced that it has secured additional investment through a round of venture funding led by BNP Private Equity. Other investors included Societe Generale Asset Management and Credit Mutuel du Nord Europe.
CHAMP Ventures Pty Ltd. announced today the first close of its new Australian private equity fund, CHAMP Ventures Investments Trust No. 5, with commitments of A$64 million. The fund is targeted at A$150 million and expects a final close in early 2003. CHAMP Ventures is part of the Castle Harlan Australian Mezzanine Partners group, based in Sydney.
Michael Rogowiski, president of the Federal Association of German Industries, has joined the European advisory board of the Carlyle Group. In his new position, Rogowiski will advise Carlyle on the automotive and engineering buyout opportunities in Europe.AmeriPath Inc. (Nasdaq:PATH), a national provider of cancer diagnostics and genomics services, has agreed to be acquired by Amy Acquisition Corp., a company formed by buyout firm Welsh, Carson, Anderson & Stowe (currently a 4.9% shareholder in AmeriPath). The transaction is valued at approximately $839.4 million, including AmeriPath’s anticipated indebtedness of approximately $106.9 million to be refinanced, and including an estimated present value of $65.1 million of certain existing contingent obligations to be assumed. Pursuant to the merger agreement, outstanding shares of common stock of AmeriPath will be converted into the right to receive $21.25 per share in cash. The deal was unanimously approved by the AmeriPath board of directors, and is expected to close by April 30.

Jeffrey Bussgang has been added as a general partner to the Boston office of IDG Ventures, a venture capital firm affiliated with International Data Group. Bussgang, the co-founder and former executive vice president of Upromise Inc., will focus on identifying new investment opportunities in the enterprise solutions and information technology sectors.

Cyberkinetics Inc., a Providence, R.I.-based neurotechnology company, announced today an initial $5 million closing in its Series A financing. The round included an investment from Oxford Bioscience Partners of $4 million and $1 million from George Hatsopoulos, founder and chairman emeritus of Thermo Electron Corp. IN related news, Cyberkinetics also completed a merger with Bionic Technologies LLC, a Salt Lake City-based developer of products for neural recording and stimulation.

QRxPharma Pty Ltd., a developmental-stage biopharmaceutical company with offices in Boston and Australia, today announced the completion of a $5 million Series A preferred stock financing led by Innovation Capital. Also included among the investors were Nanyang Ventures, SpringRidge Ventures and UniSeed.

MarkMonitor, a Boise, Idaho-based provider of online management of intellectual property, today announced that it has secured $7 million in its second round of equity financing from Foundation Capital.

Northrop Grumman Corp. (NYSE: NOC) announced today that it has agreed on the essential terms of a consent decree with the United States Department of Justice that should allow the company to promptly close its acquisition of TRW Inc. (NYSE: TRW) after shareholders of both companies approve the transaction at separate meetings Dec. 11, 2002. This is good news for Blackstone Group, which needs the merger to conclude before it can complete its $7.8 billion buyout of TRW?s auto components division from Northrop Grumman.

eEye Digital Security, an Aliso Viejo, Calif.-based developer of security software technology, today announced it has raised a total of $9 million in a Series C funding round led by Insight Venture Partners.

ProSight Inc., an Israel-based developer of technology portfolio management software, said on Tuesday it has raised over $14 million in a third round of financing led by Giza Venture Capital. Genesis Partners also participated.

Dow Jones is reporting that Oaktree Capital Management has raised more than $800 million for a new mezzanine fund.

J.P. Morgan Chase will no longer make new investments in third party private equity funds, according to sources cited in today’s edition of Private Equity Week. The move is part of a gradual effort to reduce the bank’s percentage of private equity commitments as part of common equity from 15% to 10%. Other steps include exiting certain businesses and portfolio companies deemed non-central to the JPMP mission. A story in last week’s Wall Street Journal said that the bank would lower its amount of direct private equity investment dollars and raise more outside capital, but PE Week has been told that direct investing will not be touched and the report about outside fund-raising referred to the already-closed Global Investors fund.

PayCycle, a Palo Alto, Calif.-based provider of payroll management services for small businesses and accountants, recently secured $11.5 million in Series C funding led by Conning Capital Partners. Other investors included Total Technology Ventures and Series B lead backer August Capital. Since its 1999 founding, PayCycle has raised $20.8 million in venture financing.

MPM Capital, a venture firm focused on life sciences, today announced that it has closed its third fund with $900 million. The global investment shop also made some personnel news, by adding Markus Hosang, formerly of Hoffman La Roche, as a venture partner in MPM’s Munich office. It also promoted Robert Liptak (Boston) to general partner and CFO and Todd Foley (Boston), William Greene (San Fran) and Ilan Zipkin (San Fran) each to the level of principal.
Idun Pharmaceuticals Inc.
today announced the completion of a $22.8 million in new venture funding led by Ventana Capital Management. Other new investors include GeneChem, Hambrecht and Quist Capital Management, RBC Capital Partners, Bio-Veda Capital, and Sorrento Associates. Existing investors Venrock Associates and ARCH Venture Partners also participated. Fortis Bank served as financial advisor on the round.

Paradigm Therapeutics Ltd. today announced the successful completion of a second round of private equity funding totaling approximately 12 million pounds sterling. BioMedical Sciences Investment Fund Pte Ltd of Singapore and UK-based Technomark Medical Ventures acted as co-lead investors for the round. Other investors included Paradigm’s existing UK-based investor Avlar BioVentures Fund I as well as Avlar BioVentures Fund II. Genmab A/S also made a minority investment following the recently established alliance with Paradigm to develop therapeutic antibodies to Paradigm’s novel drug targets.

Credant Technologies, a Dallas-based provider of security software for mobile enterprises, today announced that it has secured $14 million in venture capital funding bringing the company’s total invested capital to $19.5 million. Menlo Ventures led the deal, alongside previous backer Austin Ventures.

Liquid Machines Inc., a Lexington, Mass.-based software company developing solutions for enterprise security, today announced that it has secured $4.6 million in Series A funding from Atlas Venture, Masthead Venture Partners and Draper Fisher Jurvetson New England.

Tacit Networks Inc., a Somerset, N.J.-based developer of enterprise-class wide area network (WAN)-based storage consolidation solutions, announced today that it has raised $7.3 million in its first round of funding. Investors include RRE Ventures, Canaan Partners and Silicon Alley Seed Investors.

DMOD Inc., a Boston-based provider of secure digital media workflow and distribution solutions for the media and communications industry, announced that it has received $5 million in 3rd round venture financing led by initial venture investor Greylock with participation by existing investor Pilot House Ventures Group.

Reliable Snow Plowing Inc., a Bloomington, Minn.-based snow and ice removal operation, has been sold to Private Capital Management. Goldsmith Agio Helms advised Reliable Snow Plowing on the deal.