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    PE Week Wire -- Tuesday, June 20

Tuesday TalkBack

The sun is shining, the displaced Hartford Whalers just won their first Stanley Cup and the Iraq insurgency remains in its final throes. In other words, it’s time for some Tuesday Talkback.

*** Lucy starts us off, in response to last Friday’s column on PE-related political candidates: “You forgot Andrea Silbert, candidate for Lt. Governor of Massachusetts. Although not technically a VC, she built her career by founding the Center for Women and Enterprise, the organizer of the very successful Springboard VC Forum… No organization has helped women in Massachusetts get access to venture capital more than Andrea’s CWE.”

Jana seems to have missed my sarcasm: “Your endorsements are completely inconsistent… The candidates listed have polar opposite views on a variety of social and economic issues, including abortion, gay marriage, taxes, the Iraq War and more. Are you void of principle?” Umm… let me just quote Emerson: “Foolish consistency is the hobgoblin of little minds.” Too bad he never wrote about foolish inconsistency.

*** Tim asks a question about Perella Weinberg Partners: “I’ve heard that they are going to have a direct private equity investing group. Is it true?”

I’ve heard similar rumors Tim, but the firm insists that it isn’t so. I had a conversation late last week with Terry Meguid – a PWP partner and former head of I-banking with Morgan Stanley – in which he categorically denied that the firm would either raise a private equity fund or make control investments. He did hold out the possibility that PWP could do some co-investing with clients, but will not be leading such deals. Why? Largely conflict of interest issues – apparently Joe Perella’s Morgan Stanley influence beats out Peter Weinberg’s Goldman Sachs influence – but also because the firm simply does not have the internal competency. It also has not hired any executive search firms to pilfer the ranks of KKR, Blackstone, etc.

*** Yesterday’s column included the following Howard Anderson quote: “There are very few truisms, but one I'll take to the grave is that IBM is always wrong.” Paul Kedrosky’s readers are now debating it.

*** Finally, some opposing viewpoints on last Thursday’s column, which argued that private equity firm CFOs should be a more integral part of investment decision-making. Private equity CFO “A” writes: “Thank you for this call to action. Many of us feel muzzled by the partnership structure and firm economics, but mostly by the fact that we don’t know all the ins and outs of semiconductor foundries or social networking audiences. These points may be valid, but you are right in pointing out that our lack of inside information can sometimes double as our ability to see outside of the bubble.”

Greg, however, disagrees: “Private equity firms are designed in order to get the best out of each member. Investors invest, CFOs deal with deal/fund financials, administrative partners work on administrative issues, etc. If you mix and match too much, you begin to dilute each individual’s contribution.”

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    Top Three

Amp Resources LLC, a Salt Lake City-based developer of power generation technologies, has terminated an agreed-upon acquisition of the company by Raser Technologies Inc. (NYSE Arca: RZ). No rationale has been provided, with Raser only saying that the two sides are continuing an “open and active dialogue.” The deal included approximately $38 million in cash and up to ten million shares of Raser common stock. Amp Resources is a portfolio company of Highland Capital Partners.

Kalon Semiconductor Inc., a San Diego-based, has raised $10.9 million in Series A funding. Enterprise Partners Venture Capital led the deal, and was joined by Avalon Ventures, Cisco Systems and Mission Ventures. Ali Hedayati, former GM of Intel's Centrino division and an EIR with Enterprise, has been named CEO.

Alan Lovell has stepped down as CEO of UK-based rail engineer Jarvis PLC, and will join private equity firm Terra Firma.

    VC Deals

The MicroOptical Corp., a Westwood, Mass.-based maker of eyewear viewers for the portable electronic industry, has raised $11.53 million in new VC funding. Atlas Venture led the deal, and was joined by The Hillman Co., Intel Capital and Turner Broadcasting.

Vaperma Inc., a Quebec City-based gas separation membrane company, has raised Cnd$7 million in Series A funding. SAM Private Equity led the deal, and was joined by BDC Capital and Fonds d'Investissement en Développement Durable.

Zoove Corp. (f.k.a. Teleractive Inc.), a Palo Alto, Calif.-based provider of mobile data technologies, has raised around $6.8 million in Series A funding, according to a regulatory filing. Backers include Worldview Technology Partners and Cardinal Venture Capital.

Compiere Inc., a provider of open source business applications, has raised $6 million from New Enterprise Associates. It is the company’s first round of institutional funding since being founded in 1999, and coincides with its move from Portland, Ore. to Silicon Valley.

NearbyNow Inc., a Menlo Park, Calif.-based company focused on helping retailers use the Internet to drive shoppers to offline stores, has raised $2.5 million in Series A funding, according to a regulatory filing. Backers include Draper Fisher Jurvetson and Draper Richards.

BazaarVoice Inc., an Austin, Texas–based provider of brand-building solutions, has raised $1.5 million in Series B funding from return backers like Austin Ventures, according to a regulatory filing. It raised a $4 million Series A round earlier this year.

Siron Therapeutics Inc., a Tampa, Fla.-based developer of ophthalmologic products, has emerged from stealth mode with an undisclosed amount of VC funding from NovaQuest.

Implicit Monitoring Solutions LP of Dallas has received $25 million in private equity and debt funding commitments from B/K Venture Capital. The company provides technologies and resources to help companies more effectively manage their oil and gas producing assets.

    Buyout Deals

The Bank of Scotland has sponsored a £350 million management buyout of Vue Entertainment, a UK-based cinema developer and operator. Sellers include Boston Ventures, Clarity Partners and Legal & General Ventures. Vue management will hold a 51% position.

Accel-KKR has acquired a majority equity stake in IntrinsiQ Research Inc., a Waltham, Mass.–based provider of medical oncology care software and automated longitudinal data on trends in cancer drug usage. No financial terms were disclosed.

Univision Communications Inc. (NYSE: UVN) is expecting initial buyout bids today from a pair of investor groups. One includes Haim Saban, Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group and Thomas H. Lee Partners. The other includes Grupo Televisa, Venevision, Bain Capita, Blackstone Group, Carlyle Group, Cascade Investment and Kohlberg Kravis Roberts & Co.

Gala Capital has acquired a 58% stake in Grupo Page, a Spanish telecom system operator. No financial terms were disclosed.

ABN Amro Capital France has completed its acquisition of Paris-based NextiraOne Europe from Platinum Equity. No financial terms were disclosed. NextiraOne Europe was formed in 2002, when Platinum acquired Alcatel’s enterprise distribution and services business.

Acto-Finama Private Equity has acquired Locabri, a Lyon, France–based temporary warehouses and temporary storage buildings company. No financial terms were disclosed. Locabri is expected to generate around €20 million in 2006 revenue.

    PE-Backed IPOs

Otis Spunkmeyer Inc., a San Leandro, Calif.-based cookie company, has filed to raise $230 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol OTIS, with Merrill Lynch and JPMorgan serving as co-lead underwriters. The company has been controlled by Code, Hennessey & Simmons since August 2002, with CIBC and Goldman Sachs holding minority positions.

Sucampo Pharmaceuticals Inc., a Bethesda, Md.-based drug company working with a class of compounds known as prostones, has filed to raise $86.25 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol SCMP, with Banc of America Securities and Deutsche Bank Securities serving as co-lead underwriters. Shareholders include Fujisawa Pharmaceutical Co. Ltd., Orix Corp., Mitsubishi UFJ Capital Co., Tokyo Marine and Nichido Fire Insurance Co., Mizuho Capital and Astellas Pharma Inc.

ClinPhone PLC, a UK-based provider of technology solutions to the clinical trials market, has raised £56.3 million via an IPO on the London Stock Exchange. HgCapital is among the company’s shareholders.

Allied World Assurance Holdings Ltd., a Bermuda-based insurance and reinsurance company, has set its proposed IPO terms to 8.8 million common shares to be offered at between $34 and $37 per share. It plans to trade on the NYSE under ticker symbol AWH, with Goldman Sachs serving as lead underwriter. The company was formed in November 2001 by AIG, Goldman Sachs, The Chubb Corp., Securitas Capital Fund and Swiss Re.

Home Diagnostics Inc., a Ft. Lauderdale, Fla.-based provider of blood glucose monitoring systems and disposable supplies for diabetics, has set its proposed IPO terms to 6.6 million common shares being offered at between $14 and $16 per share. It plans to trade on the Nasdaq under ticker symbol HDIX, with JPMorgan and Piper Jaffray serving as co-lead underwriters. Shareholders include Albion Investors and Medical Growth Partners.

    PE Exits

HgCapital has agreed to sell Pharma Bio-Research BV to PRA International (Nasdaq: PRAI) for €85 million in cash and stock. The deal is expected to close early next month. Pharma Bio-Research is a Dutch contract research organization focused on managing early-phase clinical trials of new drugs on behalf of global drug and biotech companies.

3i Group has agreed to sell its 48.7% stake in Atea Holding AB, a Sweden-based provider of IT infrastructure in the Nordic market, to publicly-listed Ementor ASA. The deal values Atea at €114 million.

Heritage Partners has agreed to sell Castle Rock Industries Inc. to Germany-based Alfred Karcher GmBH & Co., according to LBOWire. No financial terms were reported. Castle Rock is an Englewood, Colo.–based provider of floor and carpet maintenance equipment for commercial and industrial applications.

    PE-Backed M&A

Electrograph Systems Inc., a Hauppauge, N.Y.–based distributor of display technology solutions, has acquired International Computer Graphics Inc., a City of Industry, Calif.-based distributor of LCD, plasma and desktop displays, digital imaging peripherals and AV presentation products. No financial terms were disclosed. ESI is a portfolio company of Caxton-Iseman Capital.

Altair Engineering Inc., a Troy, Mich.-based provider of engineering software and computing technologies, has agreed to acquire Antony, France-based Mecalog Group and its RADIOSS product family of computer-aided engineering software technology. No financial terms were disclosed. Altair raised $30 million in 2004 from General Atlantic.

    Firm & Fund News

Greenhill & Co. (NYSE: GHL) has acquired Beaufort Partners, a Toronto-based I-bank formed last year by Bradley Compton (former head of Canada for Morgan Stanley) and George Estey (former head of Canada for Goldman Sachs). No financial terms of the acquisition were disclosed.

    Human Resources

Brad Briner has joined Morgan Creek Capital Management as a principal. He will focus on helping to build the firm’s private equity fund-of-funds business, beginning with the launch of Morgan Creek Partners II within the next several weeks. He has been a consultant to the firm since its founding 18 months ago, and before that was with the UNC Management Company.

Rhonda Ryan has joined AIG as a London-based vice president of private equity. She previously was head of alternative investments at Insight Investments.

Marc Particelli has been named interim chairman and CEO of CoActive Marketing Group Inc. (Nasdaq: CMKG), following the resignation of John Benfield. Particelli is an existing CoActive board member and once served as both a partner with Oak Hill Capital Management and as a managing director with Odyssey Partners.

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June 20, 2006

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