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    PE Week Wire -- Wednesday, March 15

Just Linking Around

Crain’s Chicago Business reports that a new Illinois law (sub required) will prevent state pension systems from investing in private equity funds, because the funds “refuse to sign a sworn affidavit certifying that their portfolio companies do not do business in Sudan.” The law was passed last May, and requires all Illinois funds to divest all such holdings by July 2007.

Bon French, CEO of Chicago-based fund-of-funds manager Adams Street Partners, told Crain’s that Adams Street couldn’t accept Illinois pension systems in its last fund because of the Sudan law: "We've only had one out of 20 managers be willing to give an affidavit under oath... They don't need Illinois state money. When you raise an issue like this, they say, 'Forget it.'”

Some local pension officials are asking the state to amend the law’s language to say that fund managers contracts should forbid Sudanese involvement to “the best of the manager’s knowledge.” Curious to hear what the PE Week Wire readership thinks of this law. My own opinion is that it’s about damn time. What’s currently happening in Sudan is something that future generations will not forgive us for essentially ignoring. If the private equity market can help by providing a bit more portfolio company oversight or making certain portfolio company demands, so be it. With great power – not to mention great wealth – comes great responsibility.

*** Goodwin Procter chimes in on the ABRY Partners vs. Providence Equity Partners case.

*** Constance Loizos writes about the possible remise of Bear Stearns affiliate Constellation Ventures.

*** Bill Burnham calls on politicians to end tax loopholes that promote dividend recaps.

*** Finally, there are a few spots left in our March Madness contest. Details here.

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    Top Three

Santaris Pharma, a Danish developer of RNA antagonist drugs based on locked nucleic acids, has raised €40 million in new VC funding. ABN Amro Capital Life Sciences led the deal, and was joined by Global Life Science Ventures, SPEF Venture, Vaekstfonden and return backers BankInvest, Novo Ventures, LD Pensions, Dansk Kapitalanlæg, Dansk Erhvervsinvestering, InnovationsKapital and Teknoinvest.

RazorGator Interactive Corp., a Los Angeles-based online ticket agent for sold-out sporting and entertainment events, has raised $22.8 million in Series B funding, according to a regulatory filing. Steamboat Ventures was joined on the deal by return backers Oak Investment Partners, Hercules Technology Growth Capital and Kleiner Perkins Caufield & Byers.

TransDigm Group Inc., a Cleveland-based producer of engineered aerospace components, priced nearly 11 million common shares at $21 per share (middle of $20-$22 range), for an IPO take of approximately $230 million. It will trade on the NYSE under ticker symbol TDG, while Credit Suisse and Lehman Brothers served as lead underwriters. The company was acquired in 2003 by Warburg Pincus from Odyssey Investment Partners for approximately $1.1 billion. Warburg held a 69.23% pre-IPO stake, while other significant shareholders include company management and Banc of America Capital Investors.


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    VC Deals

Icera Inc., a UK-based wireless soft modem company, has raised $40 million in Series C funding. Amadeus Capital Partners led the deal, and was joined by return backers Accel Partners, Atlas Venture and Benchmark Capital. The company has raised $82.5 million in total VC funding since its 2002 inception.

AdBrite Inc., a San Francisco-based online advertising company, has raised $8 million in Series B funding led by Sequoia Capital, according to a regulatory filing. The company is run by F*** founder Philip Kaplan.

Sequoia Pharmaceuticals Inc., a Gaithersburg, Md.-based developer of antiviral therapeutics, has raised $22.5 million in Series B funding, according to a regulatory filing. Return backers include Aberdare Ventures, Healthcare Ventures and Sofinnova Partners.

Wavemark Inc., a Littleton, Mass.-based provider of RFID products and services, has secured $4.5 million of an $8 million Series A round, according to a regulatory filing. Backers include Loeb Investors and SRK Management Co.

CodeRyte Inc., a Bethesda, Md.-based, has secured $7.2 million of an $8.52 million Series C round, according to a regulatory filing. Return backers include Polaris Venture Partners, Cardinal Ventures, Venrock Associates and Solstice Capital.

Sipera Systems Inc., a Richardson, Texas-based provider of security for VoIP, mobile and multimedia communications, has raised $13.2 million in Series B funding. Sequoia Capital led the deal, and was joined by return backers Austin Ventures and Star Ventures.

Ambarella Inc., a Sunnyvale, Calif.-based provider of high-definition video compression and image processing semiconductors, has secured $15.4 million of a $20.4 million Series B round, according to a regulatory filing. Return backers include Benchmark Capital, Matrix Partners and Walden International.

Theranos Inc., a Menlo Park, Calif.-based provider of bio-monitoring systems, has raised $9.1 million in Series B funding, according to a regulatory filing. Participants included ATA Ventures and return backer Draper Fisher Jurvetson.

Juniper Medical Inc., a Pleasanton, Calif.-based medical device company focused on non-invasive fat removal, has raised $7.5 million in Series a funding, according to a regulatory filing. Backers include Frazier Healthcare Ventures and Advanced Technology Ventures. Inc., a San Francisco–based provider of online resources for small and mid-sized enterprises, has raised $12.4 million in Series C funding. Sutter Hill Ventures led the deal, and was joined by Reed Elsevier Ventures and return backer VantagePoint Venture Partners.

Everypoint Inc., a Boston-based provider of mobile applications for content providers, has raised $10 million in second-round funding. Venrock Associates led the deal, and was joined by return backers Prism Venture Partners and TD Capital Ventures.

Revinetix Inc., a Salt Lake City-based provider of disk-based RAID network backup appliances, has raised an undisclosed amount of VC funding from Grow Utah Ventures.

BioXell SpA, a Milan, Italy-based biotech company focused on urology and inflammatory disease, has raised €10.5 million in new Series C funding. TVM Capital led the round extension, and was joined by The NEXT Fund of Finlombarda and return backers BB Biotech, Index Ventures and Life Science Partners.

Tacoda Inc., a New York-based provider of behaviorally-targeted online advertising solutions, has raised $12 million in Series C funding. Rho Ventures led the deal and was joined by return backers Union Square Ventures and Masthead Venture Partners.

    Buyout Deals

Kohlberg Kravis Roberts & Co. is leading a $13 billion bid for a majority stake in General Motors financing arm GMAC, according to The Wall Street Journal. The group also reportedly includes Wachovia, General Electric, Merrill Lynch and the Bank of Nova Scotia.

Golden Gate Capital has completed its public-to-private acquisition of GEAC Computer Corp., a global enterprise software company focused on the needs of chief financial officers. The all-cash deal was valued at approximately $1 billion, or $11.10 per share. GEAC’s shares will be delisted from both the Nasdaq and the Toronto Stock Exchange.

Carlyle/Riverstone Global Energy & Power Funds has teamed with Cherington Capital to acquire International Logging Inc., a Houston, Texas-based provider of well site drilling and formation evaluation services. NewStar Financial provided leverage, while ILI management also received an ownership percentage. No deal terms were disclosed.

Monomoy Capital Partners has agreed to acquire Republic Storage Systems Company Inc., a Canton, Ohio–based manufacturer of steel storage lockers. The deal is valued at $20 million in cash, and was formulated under Section 363 of the U.S. Bankruptcy Code.

Candover is interested in the French magazines put up for sale by Emap, according to The Financial Times. The magazine portfolio is valued at around €400 million, with Barclays Private Capital also reportedly interested.

Apax Partners is backing Robert Tchenguiz’s Gbp4 billion-plus bid for pub operator Mitchells & Butlers, according to The Times of London. The group already includes Goldman Sachs, HBOS and the Royal Bank of Scotland.

    PE-Backed IPOs

Visicu Inc., a Baltimore, Md.-based provider of network monitoring of critical care patients in hospitals, has set its proposed IPO terms to six million common shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol EICU, with Morgan Stanley serving as lead underwriter. It has raised over $20 million in VC funding since its 1998 inception, from firms like Abell Ventures, Cardinal Partners, Partech International, Pacific Venture Group, Sterling Venture Partners and Envest Ventures.

Golfsmith International Holdings Inc., an Austin, Texas-based specialty retailer of golf equipment, apparel and accessories, has filed to raise $115 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol GOLF, with Merrill Lynch and JPMorgan serving as lead underwriters. The company is controlled by First Atlantic Capital.

Willcom Inc., a Japanese wireless services company controlled by The Carlyle Group, will soon begin selecting underwriters for a flotation early next year, according to Reuters.

    PE-Related M&A

Aptuit Inc., a Greenwich, Conn.-based provider of streamlining and support services for drug developers, has completed its acquisition of InfoPro Solutions Inc., an Agoura Hills, Calif.-based provider of information systems for the drug development market. No financial terms were disclosed. Aptuit raised $150 million in private equity funding from Welsh, Carson, Anderson & Stowe earlier this year.

Auxora Inc., a Salem, N.H.-based developer of optical communications, laser and photonics products, has acquired Confluent Photonics Corp., a provider of optical bandwidth expansion technology for hybrid fiber coaxial networks. No financial terms were disclosed. Auxora has raised over $14 million in VC funding from firms like Rustic Canyon Ventures and Intel Capital, while Confluent had raised funding from Invesco Private Capital, InnoCal Venture Capital, Rustic Canyon and Tyco Capital.

Argos Therapeutics Inc., a Durham, N.C.-based immunotherapy company focused on cancer, has sold the rights to an experimental lupus therapy to Novo Nordisk for up to $69 million. Argos has raised around $60 million in VC funding from firms like The Aurora Funds, ABN Amro, Intersouth Partners, Cordova Ventures, TVM Capital, MDS Health Ventures, CDP Capital and Oakwood Medical Investors.

Pharmos Corp. (Nasdaq: PARS) has agreed to acquire Vela Pharmaceuticals Inc., a Ewing, N.J.–based drug company focused on CNS disorders. The deal is valued at approximately $29.7 million, including $5 million in cash and 11.5 million shares of Pharmos common stock. The deal also includes up to 8 million shares worth of milestone payments. Vela has raised around $58 million in total VC funding since its 1998 inception, from firms like Venrock Associates, New Enterprise Associates and JPMorgan Partners.

Secure Computing Corp. (Nasdaq: SCUR) has completed its $295 million acquisition of Cyberguard Corp. (Nasdaq: CGFW). The deal was partially financed via a $70 million PIPE infusion from Warburg Pincus.

Neiman Marcus Group has put brands Kate Spade and Laura Mercier up for auction, according to the NY Post. The deal is expected to be valued at just over $75 million. Neiman Marcus was acquired last year in a $5.1 billion public-to-private buyout by Texas Pacific Group and Warburg Pincus.

    Human Resources

Taketo Yamakawa has joined Kohlberg Kravis Roberts & Co. to head up the firm’s Japanese operations. He previously was CEO of GE Consumer Finance Northeast Asia. He will lead KKR’s new Tokyo office, which is expected to include between five and seven staffers.

Robert Brownell has joined MedVenture Associates as a partner. He previously served as vice president and general counsel of former MedVenture portfolio company TheraSense Inc.

Zhao Jing has resigned as co-head of China I-banking for Morgan Stanley. She has not indicated future plans, although Dow Jones reports that she has discussed joining Citigroup. Her resignation closely follows the departure of Jonathan Zhu, who left Morgan Stanley to run China operations for Bain Capital.

Roy Prosterman, founder and chairman emeritus of the Rural Development Institute, has been awarded the inaugural Henry R. Kravis Prize in Leadership. The Kravis Prize carries a $250,000 award (which Prosterman is donating to the RDI), and is given to someone exhibiting extraordinary leadership in the non-profit sector.

Michelle LeRoy has joined placement agent Crane Capital Associates as a managing partner focused on real estate funds. She previously was head of investor relations for SL Green Realty Corp. and Gramercy Capital Corp.

Mark Fennessy has joined the London office of law firm Hunton & Williams, in order to help launch a corporate recovery and insolvency practice. He previously was head of corporate recovery with Clyde & Co.

    In Memoriam

Andy Pearson, former president of PepsiCo and a former partner with Clayton, Dubilier & Rice, passed away Saturday at his home. He was 80 years-old.

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March 14, 2006

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