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    PE Week Wire -- Wednesday, February 9

Random Ramblings

Big news and deadline day, which means I'm running more behind schedule than usual. But I'd feel bad if all I contributed to your morning routine were news blurbs, so here are a few things to start the day (unless you're in Europe or Asia, in which case this could be considered late afternoon or bedtime reading):

* Mark Anson, chief investment officer for CalPERS, yesterday said that the U.S. private equity market could be setting itself up for a crash, due to a confluence of LBO fund overhang, rising interest rates and the intrusion of hedge funds. A startlingly dour assertion for one of the asset class' large investors.

* PE Week's Jerry Borrell talks to some investors about the 2005 outlook for VC-backed biotech IPOs.

* Tim Oren of Pacifica Fund blogs on the activities of In-Q-Tel (scroll down a bit).

* Finally, does this editorial cartoon in today's Boston Globe remind you of anything you read yesterday?

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    Top Three

Five Prime Therapeutics Inc., a South San Francisco-based drug discovery company, has raised $45 million in fourth-round funding (each round has involved Series A preferred stock). Domain Associates led the deal, and was joined by HealthCap, JP Morgan Bay Area Equity Fund and return backers Kleiner Perkins Caufield & Byers, Versant Ventures, Texas Pacific Group, Advanced Technology Ventures, The Wellcome Trust, Diamond Capital Co. and a Bio*One subsidiary named Singapore BioInnovations Pte. Ltd. The company has raised nearly $85 million in total venture funding since its 2002 inception, including a $9.5 million infusion in late 2003 at a post-money valuation of approximately $50.5 million. www.fiveprime.net

SBS Broadcasting SA (Nasdaq: SBTV) has agreed to purchase Sweden-based C More Group AB from Baker Capital and Nordic Capital for 269.8 million euros in cash. C More was created in October 2003, when Baker and Nordic acquired pay-TV provider Canal+ Television from Vivendi Universal. www.canalplus.se

Accel-KKR is raising its second fund, with a target capitalization of $200 million, according to a regulatory filing. www.accel-kkr.com

    VC Deals

LVL7 Systems Inc., a Morrisville, N.C.-based provider of networking software for communications system manufacturers, has raised $21 million in Series C funding. U.S. Venture Partners led the deal, and was joined by Lighthouse Capital Partners and return backers Carlyle Venture Partners, Gabriel Venture Partners, H.I.G. Ventures and Research Triangle Ventures. www.lvl7.com

Method Products Inc., a San Francisco-based provider of branded home products, has raised $10 million in Series C funding. London Merchant Securities led the deal, and was joined by return backers H&S Blue Chip, Sumitomo Corp. and former Yahoo CEO Tim Koogle. www.methodhome.com

CallMiner Inc., a Cape Coral, Fla.-based provider of speech analytics software, has received an undisclosed amount of funding from In-Q-Tel, the venture capital wing of the Central Intelligence Agency. Existing CallMiner backers include Inflexion Partners, Intersouth Partners and Village Ventures. www.callminer.com

Pelion Systems Inc., a Lafayette, Colo.-based provider of manufacturing process optimization solutions, has received an undisclosed amount of venture capital funding from the UPS Strategic Enterprise Fund. Existing Pelion backers include Inverness Capital Partners and Cordova Ventures. www.pelionsystems.com

Alfa Leisure Inc., a Chino, Calif.-based maker of motor-homes and fifth-wheel travel trailers, has received $10.9 million in funding from Nogales Investors. www.alfaleisure.com www.nogalesinvestors.com

Ko-Brite Corp., an LED manufacturer with operations in Asia, has been formed by Kopin Corp. (Nasdaq: KOPN), WK Technology Fund, Taiwanese semiconductor company KTC and an unnamed LED packaging manufacturer. The company is capitalized with $14.5 million. www.kopin.com

    Buyout Deals

Investcorp has agreed to acquire American Tire Distributors Inc. from majority shareholder Charlesbank Capital Partners. No financial terms were disclosed on the deal, which is expected to close in late March. American Tire Distributors is a Charlotte, N.C.-based distributor of tires to the U.S. replacement tire market. www.americantiredistributors.com

The Blackstone Group has teamed with Robert Krakoff to pursue opportunities in the B2B communications and media industry. Krakoff is the former chairman and CEO of Advanstar Inc., and also the former vice chairman of Reed Elsevier Inc.

Lime Rock Partners has committed up to $30 million in equity financing over the next three years to Slate River Resources LLC, a new Denver-based oil and natural gas exploration and production company. www.lrpartners.com

Wind Point Partners has acquired Waterbury Acquisition Corp. from J.O. Hambro Capital Management and Mezzanine Management for an undisclosed amount. Waterbury Acquisition is a Waterbury, Conn.-based maker of environmental hygiene products. Brown Gibbons Lang & Co. advised Waterbury on the deal. www.windpointpartners.com

Builders TradeSource Corp., an acquisition platform company formed by SKM Growth Investors and Four Corners Capital Partners, has acquired Paradise Electric Inc., a provider of electrical contracting services in Southern California. No financial terms were disclosed.

The Baring English Growth Fund has sponsored a GBP 20 million management buyout of Stone Computers, a UK-based provider of desktop computers and other branded IT hardware to the public sector and educational markets. www.stonecomputers.com

Woolworths Group PLC reportedly has rejected an informal GBP 789 million buyout bid from Apax Partners, claiming the price was too low. www.woolworths.com

    PE-Backed IPOs

Emageon Inc., a Birmingham, Ala.-based provider of IT solutions for the clinical analysis and management of digital medical images within healthcare provider groups, priced five million common shares at $13 per share (low end of $13-$15 range), for an IPO take of approximately $65 million. The company had raised venture capital funding from such firms as Southeastern Management Co., Aurora Funds, Paradigm Venture Partners and Greystone Capital Partners. It will trade on the Nasdaq under ticker symbol EMAG. www.emageon.com

Valor Communications Group Inc., an Irving, Texas-based provider of telecom services, priced 29.37 million common shares at $15 per share (below $16-$18 range), for a total IPO take of approximately $440.55 million. The company was formed in 2000 after the acquisition of select telephone assets from GTW Southwest Corp., which now is part of Verizon. Equity sponsors on the deal - and subsequent shareholders in Valor - were Welsh, Carson, Anderson & Stowe, Citicorp Venture Capital and Vestar Capital Partners. It plans to trade on the NYSE under ticker symbol VCG. www.valortelecom.com

FTD Group Inc., a Downers Grove, Ill.-based provider of floral products, priced 13.1 million common shares at $13 per share (middle of $12-$14 offering range). Leonard Green & Partners acquired FTD last year in a public-to-private transaction worth approximately $420 million, and was expected to hold a 53.6% post-IPO position. FTD plans to trade on the NYSE under ticker symbol FTD. www.ftd.com

Infiniti Solutions Ltd., a Singapore-based provider of semiconductor test and assembly services, has withdrawn registration papers for its proposed $66.35 million IPO on the Nasdaq, citing "current market conditions." The company listed both 3i Group and EDB Investments as significant shareholders. www.infinitisolutions.com

    PE-Backed M&A

Microsoft Corp. (Nasdaq: MSFT) has agreed to acquire Sybari Software Inc., an East Northport, N.Y.-based provider of anti-v*rus, anti-sp*m and content filtering software. No financial terms were disclosed. Sybari currently is in registration for a $57.5 million IPO, and has received funding from Summit Partners (25% ownership position). It is expected to withdraw its IPO registration papers. www.sybari.com

Genzyme Corp. (Nasdaq: GENZ) has acquired Verigen AG, a Germany-based developer of cell therapy solutions for cartilage repair. The deal includes $10 million in initial payments, and the potential for up to $40 million in additional milestone payments over the next six years. Genzyne so far has acquired 96% of Verigen's shares, and expects to acquire the remaining 4% during the first half of this year. Verigen has raised venture capital funding from firms like Candover Investments, DB Investor and HgCapital. www.genzyme.com www.vtsi.de

Infotrieve Inc., a Los Angeles-based provider of content software technology and information services, has acquired GenSys Software Inc., a Santa Monica, Calif.-based provider of the electronic laboratory research notebooks. No financial terms were disclosed. Infotrieve has raised over $36 million in venture capital funding from firms like Signal Equity Partners, Trident Capital, Boston Millennia Partners and Capital Resource Partners. www.infotrieve.com www.gensys.com

ULocate Communications Inc., a Framingham, Mass.-based application service provider for wireless location-based services, has acquired GEOsnapper.com, a Palo Alto, Calif.-based developer of GPS photography. No financial terms were disclosed. ULocate has raised over $5 million in venture capital funding from firms like GrandBanks Capital and Kodiak Venture Partners. www.ulocate.com www.geosnapper.com

180Solutions Inc., a Bellevue, Wash.-based provider of search marketing solutions, has acquired application development company Easy Message. No financial terms were disclosed. 180Solutions is backed by Spectrum Equity Investors. www.180solutions.com

IMI PLC has acquired Syron Engineering & Manufacturing LLC, a Saline, Mich.-based provider of transfer automation tooling solutions for high-volume metal stamping presses. Sellers included Cedar Creek Partners, Midwest Mezzanine and company management. No financial terms were disclosed. Brown Gibbons Lang & Co. advised Syron on the deal. www.syron.com www.imiplc.com

    PIPE Deals

New Horizons Worldwide Inc. (Nasdaq: NEWH) has received $6 million in PIPE funding from Camden Partners, in exchange for a 13% ownership position and board seat for Camden Partners co-founding partner David Warnock. www.newhorizons.com

    Human Resources

O'Melveny & Myers reportedly has hired Spencer Klein, former head of the M&A practice at McDermott Will & Emery. Also moving over with Klein are fellow M&A partners Gregory Puff and Paul Scrivano. In related news, O'Melveny & Myers also reportedly has hired Wilson Sonsini Goodrich & Rosati M&A partners Steve Camahort, Michael Dorf and Michael Kennedy. www.omm.com

Cedric Abitbol has joined Switzerland-based Palomar Capital Advisors to focus on secondary private equity transactions. He previously worked on secondaries at Unigestion. www.plmr.com

William Woo has joined Ironwood Capital as a managing director. He previously served as a principal with Advent International. www.ironwoodcap.com

Willy Wilson has left Wilmer Cutler Pickering Hale and Dorr to form Wilson International Law, a Washington-based firm focused on cross-border finance and M&A transactions. He is joined by Hong Kong-based Michael March, of counsel, who previously worked at Paul Weiss Rifkind Wharton & Garrison. www.wilsoninternationallaw.com

Guy Kawasaki, founder and managing director of Garage Technology Ventures, has joined the business and technology advisory board of Encentuate Inc., a Foster City, Calif.-based provider of enterprise access security solutions. www.Encentuate.com

    Firm & Fund News

The New York State Teachers' Retirement System has committed: up to $250 million to Lexington Co-Investment Partners II; up to $100 million for Carlyle Partners IV; up to $50 million for JLL Partners Fund V; and up to $75 million for DLJ Real Estate Capital Partners III. It also hired Callan Associates as its private equity consultant for the period of April 1, 2005 through January 31, 2006. www.nystrs.org

Banyan Capital Partners, a Vancouver-based venture capital firm, has held a Cdn$80 million first close on its Cdn$100 million-targeted second fund. Limited partners include B Investment Management Corp. and the Canadian Imperial Bank of Commerce. www.banyancapitalpartners.com

Polaris Equity Partners, a Danish private equity firm focused on industrial and service sector businesses in Denmark and Sweden, has held a 180 million euros first close on its second fund. It plans to secure an additional 40 million euros. Committed limited partners include A.P. Moller-Maarsk, ATP Private Equity, Danica Pension, Danske Bank, PFA Pension and Kirkbi, Topdanmark, PensionDanmark and Islandsbanki. www.polarisequity.dk

Correction: Yesterday's news item on Harlem Furniture should have been in the Buyout Deals section, not the VC Deals section.


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February 9, 2005


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