On CalPERS and Biotech IPOs I just got back from a poorly-timed breakfast meeting with a VC (my fault, not hers), so just time for two quick notes: 1. Mark Anson, CIO of CalPERS, was not available yesterday for further discussion of his By the way, Anson used year-end 2003 numbers to suggest that the private equity market overhang was $182 billion. I was able to get some more current figures from Thomson Venture Economics (our affiliated data provider), which show a $99.5 billion overhang in the buyouts and mezzanine markets as of 9/30/04, and $206 billion for the private equity market as a whole (inclusive of VC and other assorted sub-asset classes). Either way, Anson has a point, particularly with tons of new LBO and VC fund capital rushing into market. The question is what he plans to do about it. We'll keep watching. 2. More possible evidence of the biotech IPO window closing: AlgoRx just cut its proposed offering price range, and Peninsula Pharmaceuticals has (again) postponed its IPO, this time because it has entered merger talks with an unknown drug company. BusinessWeek's Sarah Lacy keeps making her case here, but I have a quick public question: Isn't it possible that reduced-price IPOs still make sense for many of these companies, plus for public market buyers? Sure, they all file to raise $86.25 million and don't get close, but the M&A market still isn't great for biotech, and most of these companies can't get the types of private valuations they got in late-2003 or early-2004 (when there was a mini-biotech valuation bubble). Consider these financing events more than exits, and wait for a pop when products get through the clinic. Still just thinking out loud. Interested in placing your text ad in this spot? Learn How
Cytyc Corp. (Nasdaq: CYTC) has agreed to acquire Proxima Therapeutics Inc., an Alpharetta, Ga.-based developer of cancer treatment systems, with a particular focus on radiation treatment systems for breast cancer. The deal is valued at $160 million in cash, plus an unspecified two-year earnout based on sales milestones. Proxima Therapeutics has raised over $50 million in VC funding since its 1995 inception, including a $14 million Series E infusion in 2002 at a post-money valuation of approximately $91 million. Company backers include Domain Associates, New Enterprise Associates, Hillman Ventures, Boston Scientific Corp., Liberty Ridge Capital, Merrill Lynch, Montagu Newhall Associates, NeuroVentures Capital and Lovett Miller & Co. www.proximatherapeutics.com Ronald Rittenmeyer, former president and CEO of Safety-Kleen Corp., has joined The Cypress Group as a managing director. The Cypress Group is currently raising a new fund. www.cypressgp.com BinOptics Corp., an Ithaca, N.Y.-based provider of integrated microphotonic chips for datacom, telecom and optical storage applications, has raised $10 million in Series B funding. FA Technology Ventures and ArrowPath Capital were joined on the deal by return backers Draper fisher Jurvetson and Cayuga Venture Fund. www.binoptics.com
Vericept Corp., an Englewood, Colo.-based provider of compliance and content control solutions, has raised $12.5 million in new venture capital funding. Globespan Capital Partners led the deal, and was joined by return backers Sigma Partners, William Blair Capital Partners and Sequel Venture Partners. The company has raised approximately $35 million in total VC funding since its 1999 funding. www.vericept.com The Mobile Media Co., an Veveo.tv Inc., a Waltham, Mass.-based provider of video and multimedia software and services, last year raised $14 million in Series A funding from Matrix Partners, Norwest Venture Partners and North Bridge Venture Partners. www.veveo.tv Secure Software Inc., a McLean, Va.-based , has raised $9.25 million in Series B funding. Updata Partners led the deal, and was joined by return backers Charles River Ventures, Valhalla Partners and Amalia Ltd. www.securesoftware.com
Industrial Growth Partners has acquired Global Power Systems LLC, a Houma, La.-based provider of repair and maintenance services for marine diesel engines operated primarily in the Altor is sponsoring a management buyout of Danish life sciences company
Prestige Brands Holdings Inc., an Irvington, N.Y.-based provider of over-the-counter drugs, personal care products and household cleaning products (including Comet), priced 28 million common shares at $16 per share, for a total IPO take of approximately $448 million. It had only filed to piece around 23.33 million shares at between $14 and $16 per share. Prestige Brands was launched as a consumer products acquisition platform in 1999 by MidOcean Partners, which later sold it to GTCR Golder-Rauner. www.prestigebrands.com Syniverse Holdings Inc., a Tampa, Fla.-based provider of mission-critical technology services to wireless telecom companies, priced 17.62 million common shares at $16 per share (below its $20-$22 offering range), for an IPO take of approximately $282 million. The company was founded in 1987 as a unit of GTE, which later merged with Bell Atlantic to form Verizon Communications. In February 2002, senior management of the unit participated in a management buyout sponsored by GTCR-Golder Rauner. www.syniverse.com Peninsula Pharmaceuticals Inc., an Alameda, Calif.-based drug company focused on anti-infective products, has entered talks to be acquired by an undisclosed pharmaceutical company. As a result,
Powerwave Technologies Inc. (Nasdaq: PWAV) has acquired the core assets of Kaval Wireless Technologies Inc., an WebSideStory Inc. (Nasdaq: WSSI) has agreed to acquire Avivo Corp. (a.k.a. Atomz), a San Francisco-based provider of on-demand digital marketing applications, including site search and Web content management. The deal is worth approximately $41.34 million, including $4.3 million in cash and 3.1 million common shares of WebSideStory stock. Avivo has raised over $20 million in venture capital funding from firms like New Enterprise Associates, Sofinnova Partners, Fenwick & West and WS Investments. www.websidestory.com www.atomz.com Marie Brizard & Roger International, a France-based beverage company controlled by Duke Street Capital, has acquired French spirits provider William Pitters International. No financial terms were disclosed. www.mariebrizard.com www.williampitters.com Broadcast Electronics Inc. of Freescale Semiconductor Inc. (NYSE: FSL) has acquired the assets of PrairieComm Inc., a Rolling Meadows, Ill.-based developer of 3G baseband solutions. No financial terms were disclosed. PrairieComm has raised over $45 million in venture capital funding from firms like Greylock and Lucent Venture Partners. www.freescale.com www.prairiecomm.com
Greenbriar Equity Group, a Rye, N.Y.-based private equity firm focused on the transportation industry, has named CFO Kathleen Moran and principals John Daileader and Jill Raker as managing directors. www.greenbriarequity.com William Greshak has joined Stout Stout Risius Ross Inc. as a director in its Valuation & Litigation Advisory Services Group. He previously served as a senior manager in Ernst & Young's Investigative and Dispute Services practice. www.srr.com Jonathan Aberman and David Dutil have been named of counsel in the business and finance practice of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. Both men previously worked in the corporate and securities group of Fish & Richardson. www.mintz.com
The BioStar Private Equity Fund of
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February 10, 2005 
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