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    PE Week Wire -- Friday, June 23

Time To (Briefly) Rest

A reader recently informed me that it has been more than one year since I last took any vacation. The only thing more disturbing than this apparent workaholism is that any of you are actually keeping track. So, without further ado, I will spend the next two weeks writing the great American novel (read: doing yard work and attending weddings). Buyouts Magazine managing editor Ken MacFadyen will fill in for me on the news section, so please send any and all press releases to This blue text will be filled with the ramblings of some guest columnists, whom I preemptively thank for taking up my slack.

Before leaving, just a few minor things to cross off of the storyboard:

*** Cliff Higgerson is still not returning to ComVentures, the firm he co-founded and then abruptly left two years ago. Instead, he’s signed on as a venture partner with Walden International, which will allow him to pursue both his traditional interest in early-stage communications companies and his burgeoning fascination with China. Cliff also will continue to work occasionally with both InnoCal Venture Capital and Crescendo Ventures (where he and his admin had been borrowing office space since leaving ComVen). As for relations with his former firm, let’s just politely say that they remain strained.

*** Quiz Question: Can you name the NYC-based private equity firm that is about to close on $3 billion-plus for its inaugural fund. Expect the final closing before I return from vacation.

*** Quiz Answer: I recently noted that Oxford BioScience Partners had reduced its new fund target from $400m to $325m, and then asked: “Can you name a rival firm that not only is keeping its $400 million target, but which also just held a $225 million first close?” Two readers correctly guessed SV Life Sciences.

*** Peter Rip has an interesting behind-the-scenes post (scroll down) on LeapFrog’s investment in Abgenial Systems. Too bad it leaves up a bit high and dry at the end…

*** Many of you participated in the ACG/Thomson Financial DealMakers Survey, and now you can view the results.

*** Finally, this issue basically represents the PE Week Wire’s four-year anniversary (start date was June 24, 2002). Thank you for being such loyal and respondent readers, and I look forward to being back with you on July 10.

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    Top Three

Kosmix Corp., a Mountain View, Calif.-based online search company, has raised $18.3 million in Series C funding, according to a regulatory filing. Backers include Accel Partners and Lightspeed Venture Partners.

Univision Communications Inc. still may receive an offer from the buyout consortium led by Grupo Televisa and Venevision, despite that group’s recent loss of three private equity firms. Bloomberg reports that the group could submit its bid as early as today, with Bain Capital and Cascade Capital increasing their contributions, in order to fill the capital gap left by defectors Carlyle Group, Blackstone Group and KKR.

Blue Coat Systems Inc. (Nasdaq: BCSI), a Sunnyvale, Calif.–based provider of secure content and application delivery solutions, has raised $42 million in PIPE funding from Francisco Partners and Sequoia Capital. The deal includes shares of Series A preferred stock which are convertible into 2.4 million shares of Blue Coat common stock at $17.525 per share. The preferred shares contain a liquidation preference, a redemption feature, certain registration rights and entitle Francisco and Sequoia to elect one member to Blue Coat’s board of directors. Some of the proceeds will be used to acquire the NetCache business of Network Appliance (Nasdaq: NTAP).

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    VC Deals

TZero Technologies Inc., a Sunnyvale, Calif.-based fables semiconductor company that provides UWB solutions for delivering video throughout the home without wires, has secured $22 million of a $25.74 million Series B round, according to a regulatory filing. OVP Venture Partners was joined by return backers August Capital, Lightspeed Venture Partners and U.S. Venture Partners.

ConSentry Networks Inc., a Milpitas, Calif.-based provider of network security solutions, has raised around $20 million in Series D funding, according to a regulatory filing. DAG Ventures was joined by return backers Accel Partners, Invesco Private Capital and Sequoia Capital.

LignUp Corp., a Mountain View, Calif.–based provider of an enterprise VoIP platform, has raised $9.8 million in Series B funding. New backers include Intel Capital, The Entrepreneurs’ Funds, Weber Capital Management, Draper Associates and Regis McKenna. Return backers include Wasatch Venture Fund, University Venture Fund and vSpring Capital.

Verimatrix Inc., a San Diego-based provider of digital video content security solutions, has raised $8 million in second-round funding. Crescendo Ventures led the deal, and was joined by Mission Ventures and Siemens Venture Capital.

Alloptic Inc., a Livermore, Calif.-based provider of gigabit Ethernet passive optical network access solutions, has raised $8 million in growth funding from Acapita Ventures. Alloptic has raised over $92 million in total VC funding since its 1999 inception.

CoalTek Inc., a Tucker, Ga.-based developer of clean coal technology, has raised $5 million in Series B-1 funding, according to a regulatory filing. Return backers include Warburg Pincus, Draper Fisher Jurvetson, DFJ Element and Braemar Energy Partners.

Sionyx Inc., a Cambridge, Mass.-based developer of silicon-based materials, has secured $750,000 of a $1.5 million Series A round from Harris & Harris Group, according to a regulatory filing.

Prometheus Energy Co., a Seattle-based developer of gas purification and liquidation systems, has raised $20.2 million in equity funding and a $25 million line of credit, according to The Seattle Post-Intelligencer. A regulatory filing indicates that company shareholders include CryoFuel, Cascadia Energy Services, Sowood Capital and Libra Natural Resources., a Sweden-based provider of an online celebrity dress-up and makeover destination, has raised an undisclosed amount of funding from Sequoia Capital, according to blogger Om Malik. StarDoll raised $4 million in Series A funding earlier this year from Index Ventures.

    Buyout Deals

Macquarie Bank has agreed to buy the London bus operations of publicly-traded Stagecoach Group PLC, for £263.5 million. The deal includes £72 million in equity.

Federated Department Stores Inc. (NYSE:FD) has agreed to sell its Lord & Taylor division to NRDC Equity Partners LLC, a partnership between principals of Apollo Real Estate Advisors and the principals of National Realty & Development Corp. The deal is valued at $1.195 billion in cash, and is expected to close next quarter.

CDC Corp. is complaining to federal regulators about $4.5 million in breakup fees that Onyx Software Corp. (Nasdaq: ONXS) has agreed to pay M2M Holdings Inc. (a.k.a. Made2Manage), if Onyx were to cancel an agreed-upon $92 sale to M2M. CDC recently bid $96 million for Onyx. M2M is owned by Battery Ventures and Thoma Cressey Equity Partners.

The Carlyle Group has been slowed in its efforts to acquire Taiwan-based cable television operator Eastern Multimedia Co., due to regulator requests for additional information. The deal is valued at approximately $1.5 billion.

Kelso & Co. and MDS Capital have committed $230 million to form an acquisition platform focused on electrical equipment distributors (U.S. Electrical Systems Inc.), according to The Deal.

    PE-Backed IPOs

Info Edge India Pvt Ltd., an India-based operator of the employment website, has filed to raise $29 million via an IPO on the Bombay Stock Exchange. Info Edge has raised VC funding from Kleiner Perkins Caufield & Byers, ICICI Ventures and Sherpalo Ventures.

Innate Pharma SA, a France-based developer of cancer immunotherapies, has filed to float on the Euronext in Paris. Shareholders include AXA Private Equity, Auriga Partners, Alta Partners, GIMV, NIF, Quilvest Private Equity and Sofinnova Partners.

    PE Exits

Sun European Partners reportedly is in talks to sell UK-based van company LDV Group to Russian car manufacturer Gaz.

H&Q Asia Pacific said that it has divested its entire holdings in the Shanghai Links Executive Community, an exclusive residential community located in Shanghai's Pudong area. No additional information was disclosed.

Telco Systems Inc., a subsidiary of BATM Advanced Communications Ltd. (LSE: BVC), has agreed to acquire Metrobility Optical Systems Inc., a Merrimack, N.H.-based provider of optical Ethernet equipment to the enterprise. The deal is valued at $6.85 million in cash, over three separate payments. Metrobility has raised around $22 million in VC funding from firms like Sierra Ventures, North Atlantic Capital, Coastal Ventures and CEI Ventures.

    PE-Backed M&A

Nordic International Holding AS, a portfolio company of Pod Holding and Via Venture Partners, has acquired over 90% of Norway-based Adra Match ASA for €8 million. Adra is a publicly-listed supplier of financial software and services, with a focus on automatic accounts reconsiliation. It was advised by EOC Partners on the sale.

    Bad News

Platform Learning Inc., a New York-based provider of after-school tutoring services, has filed for Chapter 11 bankruptcy protection. It had raised over $20 million in VC funding since its 2003 inception, from firms like Ascend Venture Group, Capital Resource Partners, New York City Investment Fund, Quad Ventures and AlpInvest Partners.

    Firm & Fund News

Kolberg Kravis Roberts & Co. next year will raise up to $2 billion for an Asia-focused fund, according to PrivateEquityOnline.

Nth Power has held a $70 million first close on its $200 million-targeted fourth fund, according to VentureWire. The San Francisco-based firm focuses on the energy sector.

Glenmede of Wilmington, Del. is raising its third private equity fund-of-funds with a $100 million target capitalization, according to a regulatory filing.

    Human Resources

Cliff Higgerson has joined Walden International as a venture partner. He previously served as co-founder of ComVentures and, before that, as a general partner with Vanguard Ventures.

Timothy Ortez has joined Drum Capital Management as a managing director and head of the Norwalk, Conn.-based firm’s new West Coast office in San Bernardino County, California. Ortez previously was with Commonfund as a managing director and Western Regional team leader.

Tibor Toth has joined the mezzanine and private equity group of Babson Capital Management, after previously having served as a principal with Ascent Venture Partners.

Marie Oldham has joined Chapman and Cutler as a Chicago-based partner focused on lending structures for both large-cap and middle-market companies. She previously had been a corporate lending partner with Winston & Strawn.

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June 23, 2006

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