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    PE Week Wire -- Monday, July 18

Battery Ventures Is Not Alone

Last Friday, this space briefly noted that a Beijing-based group of grifters had launched a website that virtually mirrored that of Wellesley, Mass.-based Battery Ventures, down to headshots of Battery Ventures general partners and the names of Battery Ventures portfolio companies. Copyright fraud is the obvious crime here, although securities fraud would be a close second if someone can prove that the folks calling themselves “American Battery Investment Group” have traded on Battery Ventures’ reputation to raise/steal capital of its own. In fact, Battery Ventures is taking the insidious imitation seriously enough to post a “we are not affiliated” message on its homepage.

But Battery is only the latest in a growing line of firms that have seen their websites be used as scam templates. For example, take a look at this site for a group calling itself “American Union International Investment Group.” The splash page might not look familiar, but go inside to a section like Assets Under Management. Now compare it to the Assets Under Management section on The Carlyle Group’s website. That’s right, an exact match.

Further exploration of the AUIIG site finds even more content copied and pasted directly from Carlyle’s site, plus a bunch of phony bios for a bunch of phony partners (plus a bunch of fictional advisory board members with familiar last names like Bush and Clinton). Had you looked at the site a couple weeks back, however, you would have found bios for actual Carlyle professionals with the first names changed (e.g., David B. Daniel suddenly became David B. Green). AUIIG also is a China-based site featuring an alternate phone number on the West Coast, although a private equity attorney I spoke with this morning says that he’s seen similar rip-off sites emanating from countries in Europe.

The reason all of this matters, of course, is because these sites are designed to steal people’s money. The Chinese-language version of the “American Battery Investment Group” site implies that entrepreneurs can receive VC funding after paying a small processing fee. A source told me that the AUIIG folks had an in-person fund-raising meeting with someone in Asia, and only were discovered after that person called up Carlyle Group (with which he had an existing relationship) and said: “Hey, this new group sounds like they do the same thing Carlyle does.”

While law enforcement and the SEC try sorting all of this out – in part via the CA phone numbers and mailing addresses – I would recommend that private equity firms do a bit of sleuthing on their own in order to learn if their own sites have been copied. Take phrases specific to your website and drop them into search engines like Google. Also probably a good idea to translate one into Chinese and drop it into Make sure to let me know if you find something, so that we can warn PE Week Wire readers.


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    Top Three


Whirlpool Corp. (NYSE: WHR) has emerged as the third possible bidder for Maytag Corp. (NYSE: MYG), after submitting an unsolicited $17 per share proposal. Maytag originally accepted a $14 per share offer from private equity firm Ripplewood Holdings, but has since given consideration to a $16 per share offer from a consortium that includes Bain Capital, Blackstone Group and Chinese appliance company Haier America Trading. Ripplewood already has claimed that Maytag's discussions with the Bain/Blackstone/Haier group could provide grounds for exercising the termination clause, while Maytag disagrees and says it will consider all three proposals.

Affymax Inc., a Palo Alto, Calif.-based drug development company, has raised $60 million in Series D funding. Jafco Co. Ltd. and return backer Bear Stearns Health Innoventures co-led the deal. In addition to Jafco, new inv*stors included Bessemer Venture Partners, Merlin BioMed Group and Diamond Capital Co., while other return participants included Apax Partners, MPM Capital and Sprout Group. Affymax has raised over $150 million in total VC funding since its 2001 inception. Its lead drug candidate is being developed for the treatment of anemia in patients with chronic kidney disease and cancer.

Thomson Venture Economics and the National Venture Capital Association have released Q2 2005 fund-raising data. It shows that 43 U.S.-based VC funds raised $6.1 billion last quarter, which is a 6.5% bump from the $5.7 billion raised by 61 funds in Q1 2005. Read the PE Week article at, and get the charts in today’s print edition.

    VC Deals Inc., a Palo Alto, Calif.-based operator on an online customized products marketplace, has raised $16 million in Series A funding. Kleiner Perkins Caufield & Byers led the deal, and were joined by Sherpalo Ventures.

ConSentry Networks Inc. (f.k.a. Tidal Networks), a Milpitas, Calif.–based provider of enterprise network security solutions, has raised $17 million in Series C funding. Invesco Private Capital was joined on the deal by return backers Accel Partners and Sequoia Capital. The company has raised $31 million in total VC funding since its 2003 inception.

Ellacoya Networks Inc., a Merrimack, N.H.-based provider of bandwidth management solutions for broadband service provider networks, has raised $13.5 million in Series D funding. BCE Capital led the deal, and was joined by Canaan Partners and return backers Atlas Venture, Flagship Ventures and Lightspeed Venture Partners. Ellacoya has raised over $163 million in total VC funding since its 1999 inception, including a December 2002 recap.

RoyaltyShare Inc., an Encinitas, Calif.-based provider of online services for the management and accounting of royalty payments, has raised over $2.5 million in a Series A funding round led by Trident Capital, according to a regulatory filing. The company is planning to raise upwards of $5 million.

PeptImmune Inc., a Cambridge, Mass.-based drug company, has raised $20.4 million in Series C funding (this is inclusive of the $18.66 million reported here last month). Return backers include New Enterprise Associates, Prism Venture Partners, Vanguard Ventures, MPM Capital, Hunt Ventures and Boston Medical Inv*stors, while new supporters include Itochu Corp. and Silicon Valley Bank Capital.

Columna, an Australia-based developer of spinal implant technology, reportedly has raised Au$3.5 million in VC funding from Queensland BioCapital Fund.

Quickshift Inc., an Austin, Texas-based developer of performance acceleration technologies, has raised $5.2 million in new venture capital funding from CenterPoint Ventures, InterWest Partners and STARTech Ventures.

Xention Discovery Ltd., a UK-based drug discovery company, reportedly has raised Gbp11 million in new VC funding from ABN AMRO Capital, Albany Venture Managers, BTG International, MVM Ltd. and Quester Capital Management.

Nevis Networks Inc., a Santa Clara, Calif.-based provider of LAN security systems, has raised $12.5 million in additional Series B funding. New Enterprise Associates was joined on the deal by return backers BlueRun Ventures and New Path Ventures. The Series B round total now stands at $22.5 million, while Nevis’ total VC capitalization is $32.5 million.

Mobidia Technology Inc., a British Columbia-based wireless technology company, has raised Cdn$2.5 million in second-round funding from Discovery Capital Management, Business Development Bank of Canada and B.C. Advantage Funds.

    Buyout Deals

Questor Management Co. has agreed to sell Santa Ana, Calif.-based freight forwarder and logistics service provider GeoLogistics Corp. to Kuwait-based PWC Logistics. The deal is valued at approximately $454 million on a debt-free basis, with GeoLogistics senior management remaining in place.

Vector Capital has acquired WinZip Computing Inc., a Mansfield, Conn.-based maker of the WinZip compression utility. No financial terms were disclosed.

Cendant Corp. (NYSE: JCD) today could announce the winning bidder for its marketing services division. Various press reports today suggest that Apollo Management may have topped Bain Capital in the auction, with both bids believed to be well in excess of $2 billion.

Brookstone Inc. (Nasdaq: BKST), a Merrimack, N.H.-based specialty retailer, today announced amended terms for its proposed acquisition by a consortium led by Singapore-based retailer OSIM International. Also participating are private equity firms J.W. Childs Associates and Temasek Holding Ltd. Existing Brookstone shareholders originally were expected to receive $20.50 per share, but that price now has been lowered to $20 per share. In addition, terms of the financing commitment from Goldman Sachs, UBS Loan Finance and UBS Securities has been modified.

Apax Partners has agreed to pay 565 million euros for Verestal Telecom International’s German unit, assuming Tele2 is able to acquire Verestal under the terms of a proposed 1.34 billion bid. In related news, Apax reportedly is considering a play for Vodafone’s German unit Arcor.

LamTech Inc., an Ephrata, Pa.-based maker of countertops and vanity tops, has completed a financial recap sponsored by Kildare Enterprises. LamTech was represented on the deal by The Benchmark Group. No financial terms were disclosed.

Time Warner Inc. (NYSE: TWX), Goldman Sachs and Apax Partners will not bid on UK television broadcaster ITV, according to The Financial Times. The proposed consortium reportedly had been prepping an $11.7 billion offer, but ultimately decided to disband over worries about ITV’s pension fund deficit.

    PE-Backed IPOs

Golf Galaxy Inc., an Eden Prairie, Minn.-based retailer of golfing goods, has set its proposed IPO terms to around 3.33 million common shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol GGXY, with Piper Jaffray and William Blair & Co. serving as lead underwriters. Significant shareholders include William Blair Capital Partners, Primus Capital and FdG Capital Partners.

Genomic Health Inc., a Redwood City, Calif.-based provider of genomic-based oncology diagnostics, has filed to raise $75 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol GHDX, with JPMorgan and Lehman Brothers serving as lead underwriters. The company has raised approximately $100 million in total VC funding from groups like Kleiner Perkins Caufield & Byers, Versant Ventures, TPG Ventures, Baker Tisch Inv*stments, Integral Capital Partners, Invesco Private Capital, Incyte Corp., J.P. Morgan Fleming, Pfizer and CHL Medical Partners.

Quadrapoint Acquisition Corp., a newly-formed blank check acquisition company based in Chicago, has filed to raise $75 million via an IPO. The entity is owned and managed by: Paul Lapping, president of Lapping Inv*stments and a former general partner with both Minatour Partners and Merchant Partners; Peter Venetis, managing partner of Praxis Capital Ventures; and Brian Boorstein, former managing member of Gordian Inv*stment Partners.

    PE-Backed M&A

SecurePipe Communications Inc., a Madison Wis.-based provider of managed network security services, has agreed to acquire the assets of Mycom Group Inc.’s (OTC BB: MYCM) managed services division and email management technologies. No financial terms were disclosed. SecurePipe has raised over $10 million in VC funding from groups like First Analysis Corp., Prism Capital and The Argentum Group.

IOCA Inc. (OTC BB: ICOA) has acquired LinkSpot Networks Inc., a Reston, Va.-based provider of broadband Internet networks and managed services in high-traffic public locations. No financial terms were disclosed. LinkSpot shareholders like Meritage Private Equity Funds will now become IOCA shareholders.

RAD Electronics Inc., an outsource provider of electronics manufacturing services, has raised $4.5 million in Series A funding. Chrysalis Ventures led the deal with a $3 million commitment, and was joined by Palisade Capital Management. RAD Electronics will use the proceeds to purchase the assets of electronics distributor Astrex Inc.

    Firm & Fund News

San Francisco Equity Partners has launched as a private equity firm focused on expansion-stage opportunities in the IT, media, consumer and service industries. It was founded in partnership with LMS Capital, with founding managing partner Scott Potter having overseen LMS Capital’s North American private equity and VC portfolios over the past several years. SFEP’s initial capitalization is $80 million, and it already has the following five portfolio companies: Merriman Curhan Ford & Co. (AMEX:MEM), Method Products, Penguin Computing, Rave Motion Pictures and Modviz.

Abingworth Management, a UK-based venture capital firm focused on life sciences, has held a $53 million first close on a new life sciences fund dedicated to publicly-traded companies. It is the firm’s first fund not dedicated to the private markets.

KRG Capital Partners, a Denver-based private equity firm, has received $595 million in limited partner commitments for its third fund, according to a regulatory filing. It is seeking upwards of $690 million, with Probitas Partners serving as placement agent.

Portfolio Advisors of Darien, Conn. has raised over $103 million to date for its third fund-of-funds, according to regulatory filings. Limited partners include the Archdiosesan Pension Plan of New York, Iowa West Foundation, Pennsylvania Medical Society Endowment Fund and the Snap-On Tools Collective Inv*stment Trust. The Fortress Group is serving as placement agent.

    Human Resources

Jonathan Gilbert has joined New York-based I-banking consultancy Marlin & Associates as a transaction professional. He recently received his MBA from the Zicklin School of Busineess at Baruch College.


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July 18, 2005


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