It's A Big Deal Huge news day, with Colin Powell “joining” Kleiner Perkins, Baidu.com filing to go public and AIG managing to close its Highstar fund while so much else is falling down around it. To me, though, the day’s biggest blurb (in substance, not in length) is that on-demand web analytics company Omniture raised $40 million in Series C funding. That is simply an enormous amount of money in the web analytics space, considering that Google reportedly grabbed Urchin for just $30 million, and that WebSideStory only raised $44 million in total VC funding before going public last year. Since I’m running very short on time, a couple of bullet points of interest about this company and deal * Omniture certainly could have raised money on the public markets, had it tried. WebSideStory is currently trading at around $16.30 per share, which is nearly double its IPO price of $8.50 per share. Moreover, it’s gotten some very big-name customers (just added Ford Motor Co.) and was profitable before launching a fairly extensive growth initiative. So why not go public? Is it the dreaded SarbOx? Company CEO Josh James says that the issue is one of flexibility. An IPO, he argues, could stifle Omniture’s ability to invest in sales, marketing, R&D, etc. To James, public=profitability pressure, and he doesn’t believe that he can build a market leader while always being concerned about moving from red to black (the company was once profitable, but currently is not due to the aforementioned growth initiative). Ditto for potential acquisitions, which James wouldn’t comment on, but which are almost a sure bet. * If not an IPO now, could an acquisition come later? The reality is that there are only a handful of potential acquirers for a company like Omniture (Microsoft, SalesForce.com and, possibly, Google, comes to mind). More importantly, however, folks who know Josh James suggest that he’d have to be dragged kicking and screaming into an M&A situation, no matter how lucrative. He’s clearly got a single-track vision about Omniture becoming the undisputed market leader in web analytics (this isn’t just CEO/PR lip-service), and the idea of letting someone else take over would be anathema. In other words, expect this to be the last round of private funding, with an IPO in 2007 or 2008. * What happened while BAVP worked? Rory O’Driscoll, the general partner with BA Venture Partners who led the Omniture deal, says that he first looked at Omniture a 1.5 years ago, for a round that ultimately was led by Hummer Winblad. When it came to due diligence this time around, however, he was beset by a number of unforeseen circumstances. First, the stock price of WebSideStory dropped about 23% in Mid-May, and didn’t recover for another month. Next, Google bought Urchin and immediately cut prices for Urchin customers. There also was a patent violation lawsuit brought against Omniture (and lots of other companies) by NetRatings. Despite all of this, O’Driscoll continued to believe in his initial assessment The WebSideStory trouble was temporary, he thought, and the revised Urchin pricing actually matched what BAVP had estimated in its market model. He declined to comment on the lawsuit. * What is BAVP’s vision for the web analytics space, particularly when it comes to search behemoths like Google and Yahoo: This is the only place where things get a bit confusing from a future value perspective. On the one hand, O’Driscoll and market analysts say that while Google/Urchin clearly provide competition, the ultimate market leaders will be Omniture, WebSideStory and, possibly, Webtrends (there are lots of smaller players, but they’re getting gobbled up quickly). Why? Because companies will want to buy from dedicated providers. In other words, just because a company uses Google for keyword search, doesn’t mean that it will want them to break down website visitor demographics into various silos. * OK, the “one throat to choke” theory doesn’t apply. But there is a bit of contradiction, in that Omniture and its peers are busy trying to provide all sorts of ancillary functions, including bid management, email, etc. If customers want just a dedicated provider, then why add all these bells and whistles? Isn’t Omniture trying to lure customers with a theory it believes is flawed when coming from Google? It’s a question I didn’t hear a great answer to yesterday, but I’m keeping my ears open…
Omniture Inc., an Orem, Utah-based provider of web analytics, has raised $40 million in Series C funding. BA Venture Partners led the deal, and was joined by Attractor Inv*stment Management and return backer Hummer Winblad Venture Partners. www.omniture.com
The Blackstone Group has agreed to buy Lego Co.’s four LegoLand amusement parks for 375 million euros. The parks are based in Colin Powell, former U.S. Secretary of State, has joined venture capital firm Kleiner Perkins Caufield & Byers as a strategic limited partner. www.kpcb.com
Icrossing Inc., a Scottsdale, Ariz.-based search engine marketing company, has raised $13 million from new company backers RRE Ventures and Generation Partners. The company had received a $28 million VC infusion in 2000 at a post-money valuation of approximately $103 million. www.icrossing.com Redfern Integrated Optics, an Australia-based maker of optical transmitters for the telecom and data switch markets, has raised US$6.2 million in third-round funding from Advent International, Tallwood Venture Capital, TMT Ventures and Redfern Photonics Pty Ltd. www.redfernintegrated.com
DoubleClick Inc. (Nasdaq: DCLK) has received shareholder approval for its proposed acquisition by private equity firm Hellman & Friedman. The deal is valued at $1.1 billion, or $8.50 per share. JMI Equity is also contributing equity to the buyout. www.doubleclick.com www.hf.com TA Associates has completed a $50 million majority recap of Quantitative Analytics Inc., a Chicago-based provider of database integration and analysis solutions to the financial services industry. www.qaisoftware.com www.ta.com
3i Group has agreed to buy UK-based parking services company National Car Parks Ltd. (NCP) from Cinven for approximately Gbp555 million. General Atlantic and Quadrangle Group have agreed to acquire Dice Inc., a provider of online recruiting services for tech, engineering and security-cleared professionals. No financial terms were disclosed for the deal, which will result in GA and Quadrangle each holding an equal ownership position. The Wall Street Journal, however, reports that the price tag is around $200 million. www.dice.com
Focus Media Holdings Ltd., a Baidu.com Inc., a
Net Mobile AG, a Germany-based mobile technology company, yesterday priced 2.2 million shares at 8.50 euros per share, for a total IPO take of approximately 18.7 million euros. The company will trade on the
ChannelAdvisor Corp., a Morrisville, N.C.-based provider of channel management solutions, has acquired SearchMarketing, a Seattle–based provider of natural and paid search optimization solutions for online merchants. No financial terms were disclosed. ChannelAdvisor has raised over $33 million in total VC funding, including an $18 million infusion earlier this year at a post-money valuation of approximately $23 million. Backers include Advanced Technology Ventures, Kodiak Venture Partners, TriState Inv*stment Group, eBay Inc., Atlantis Group and Southern Capitol Ventures. www.channeladvisor.com Xanodyne Pharmaceuticals Inc., a Florence, Ky.-based drug company, has won the bankruptcy auction for the pharmaceuticals division of aaiPharma Inc. (OTC BB: AAIIQ). The purchase price is $209.25 million, which is $40 million more than an original stalking horse offer announced when aaiPharma filed for Chapter 11 on Assay Designs Inc. of Jobster Inc., a Seattle-based provider of targeted job advertising services, has acquired WorkZoo Inc., Fountain Valley, Calif.-based vertical search engine for job seekers. No financial terms were disclosed. Jobster has raised VC funding from Ignition Partners and Trinity Ventures. www.jobster.com www.workzoo.com MindShift Technologies Inc., a Fairfax, Va.-based, has acquired Union Square Technology Group LLC, a New York-based provider of IT systems integration and other services to the legal sector. No financial terms were disclosed for the deal, although MindShift did say that Celenese Corp. (NYSE: CE) has received European Union approval for its proposed $492 million buyout of Canadian chemicals company Acetex Corp. Celenese is controlled by The Blackstone Group. www.blackstone.com
HB Performance Systems Inc., a braking systems maker acquired last month by Nautic Partners, has acquired the assets of Sun Metal Products, a Warsaw, Ind.-based maker of rims and wheel-sets for mountain bikes. No financial terms were disclosed for the deal, except that structured financing was provided by M&I Bank, LaSalle Bank and JPMorganChase. www.hayesbrake.com Investment Technology Group Inc. (NYSE: ITG) has agreed to acquire The MacGregor Group, a Boston–based provider of trade order management technology to the global financial market. The all-cash deal is valued at approximately $230 million, and is expected to close within the next 60 to 90 days. Private equity firms Bain Capital, Commonwealth Capital and The Audax Group own approximately 43% of Macgregor. www.itginc.com www.macgregor.com
Solexa Inc. (Nasdaq: SLXA), a Hayward, Calif.-based genetics analysis company, has received $24 million in new PIPE funding, including approximately $10.8 million from prior VC backers Abingworth Management, Amadeus Capital Partners, Oxford Bioscience Partners and SV Life Sciences. The funding represents a second close to a $32.5 million deal announced earlier this year. www.solexa.com
AIG Global Inv*stment Group has held an $800 million final close on its AIG Highstar Capital II fund, which is a group of buyout vehicles formed to back infrastructure (including energy) and related assets and businesses. Limited partners include Principal Life Insurance Co., Everest Reinsurance Co., Mars Retirement Trust, Lexington Insurance Co., British Columbia Inv*stment Management Corp., Kamil Holdings and Pioneer Group Ltd. The initial Highstar fund closed in November 2000 with capital commitments of $406 million. www.aig.com
Castle Harlan Australian Mezzanine Partners (CHAMP) is nearing a final close of between Au$900 million and Au$1 billion for its latest fund, according to Australian press reports. www.champequity.com
Ronan Cunningham has joined The National Pensions Reserve Fund of Ireland as head of private equity. He previously was a partner in the Jane Wheeler has joined Evercore Partners as a senior managing director. She most recently served as a managing director with Morgan Stanley, where she headed their securities and financial technology I-banking business. www.evercore.com
Henry Tsang and David Cheng have joined Bear Stearns Asia Ltd. Tsang joins as group president and senior managing director, after previously having co-founded Search Asian Mezzanine Capital). Cheng joins as a managing director, and most recently served as co-head of I-banking with CITC Capital Markets. www.bearstearns.com Brookwood Financial Partners of PricewaterhouseCoopers has named Gordon Medeiros as lead partner in its Transaction Services group in
| |||||||||||||||||||||||||||||
July 13, 2005 
Interested in placing
your ad above?
Learn How
| Copyright 2005 by Thomson Financial. All rights reserved. 195 Broadway, 10th Floor, New York, NY 10007 |