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    PE Week Wire - Wednesday, January 5

On Blogs 

Mixed among this morning's news items is word that blogging software company Six Apart Ltd. plans to acquire blogging software company LiveJournal. Not surprisingly, this scoopalicious nugget comes from a tech biz reporter's blog (Om Malik's broadband blog, to be exact).

Blogging is the hottest topic among journalists right now, in large part because we are forever fascinated with our own navels. The latest edition of Venture Capital Journal, for example, has devoted its cover story to the phenomenon (although it focuses on VC blogging, not journalist blogging). In an expression of good will toward men (otherwise known as cross-promotion), I've put the cover story online for free at www.VentureCapitalJournal.net. In fact, I've put almost all of this month's VCJ up for free on the site, including a dozen 2005 Outlook Q&As with VCs like Brook Byers, Steve Jurvetson, Pierre Lamond and more. They will go back behind the password-protected curtain at 5pm EST, so read quick. If you like what you see, click the "subscribe" button on the VCJ website, or call Rob Mills at 917-408-5254. It really is worth the subscription price, particularly if the money is coming out from your corporate credit card, rather than from your personal one.

As I wrote above, the VCJ article is devoted to VC blogging, rather than to journalistic blogging like this column (although I recognize that the once-a-day email format is not a blog in the pure RSS-feed sense of things). The former helps investors generate everything from deal leads to ideas that can help either the management or technology of existing portfolio companies. It is a good thing for all involved, so long as it doesn't become too time-consuming.

Journalistic blogging, on the other hand, is concerning me more and more (insert irony here). Of specific apprehension is the absolute glee in which many journalistic bloggers are heralding the fall of mainstream media (or even alternative media), and the ascension of the blogosphere. The free press only used to be for those with a physical press, they argue, but no longer. Everybody gets a say.

That's all well and good, but it ignores the single most important facet of the mainstream press: editors. Certainly such checks and balances occasionally fail or are corrupted, but they generally serve the purpose of double-checking, or at least questioning, a reporter's facts and conclusions. Most blogs, on the other hand, are neither checked nor balanced, save for ones affiliated with mainstream media organizations. If something is wrong (either intentionally or not), it needn't be corrected, save for situations where it is dictated by reader comments or blogger conscience.

This space is a bit different for two reasons. First off, as most of you know from reading the occasional afternoon correction email, I do rectify my mistakes. And while I write this column independently each morning (and, unfortunately, without much reflection) with some copy-editing assistance, I answer to editors and publishers who sign my checks and control the keys to this particular castle. Enough significant screw-ups, and those keys would be wrested away. That's untrue of most blogs, which are sole proprietor shops.

Anyway, enough navel-gazing and belly-aching, and on to the news and one free day of Venture Capital Journal.

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    Top Three

DexCom Inc., a San Diego-based developer of blood glucose monitors for those suffering from diabetes, has raised $22.5 million in Series D funding. Warburg Pincus led the deal, and was joined by fellow new investor The Vertical Group. Return backers included Canaan Partners, Federated Kaufmann Fund, Fog City Fund, RWI Group and St. Paul Venture Capital. The company has raised approximately $75 million in total VC funding since its 1999 inception. www.dexcom.com

Warburg Pincus has acquired InfoGenesis, a Santa Barbara, Calif.-based provider of IT for the hospitality and food-services industries. No financial terms were disclosed. The transaction closed on December 29, at which point InfoGenesis founder Karl Willig retired from his CEO post, and was replaced by Terry Cunningham, former president of both Seagate Software and Veritas Software. www.infogenesis.com

UGS Corp., a Plano, Texas-based product lifecycle management company, has agreed to acquire Tecnomatix Technologies Ltd. (Nasdaq: TCNO), a provider of manufacturing process management software for the automotive, electronics and aerospace industries. The deal is valued at approximately $228 million in cash, or $17 per share. UGS was acquired last year from Electronic Data Systems Corp. (NYSE: EDS) for $2.05 billion by Bain Capital, Silver Lake Partners and Warburg Pincus. www.ugs.com www.tecnomatix.com

    VC Deals

XLHealth Corp., a Baltimore-based disease management company, has raised $63.75 million in private funding from Goldman Sachs Capital Partners and Norman Payson, former chairman and CEO of Oxford Health Plans. www.xlhealth.com

JiWire Inc., a Folsom, Calif.-based provider of an online Wi-Fi hotspot atlas, has raised $2.35 million in second-round funding led by DFJ Frontier, according to The Sacramento Bee. www.jiwire.com

Caritor Inc., a San Ramon, Calif.-based IT solutions provider with offshore facilities in India, has received an undisclosed amount of strategic funding from Citigroup Venture Capital International. www.caritor.com

Infinity Pharmaceuticals Inc. of Cambridge, Mass. has entered into a collaborative agreement with Novartis AG (NYSE: NVS), to jointly design a collection of novel small molecules to be synthesized by Infinity using its chemical technology platform. As part of the agreement, Novartis will make a "significant" equity investment into Infinity, which previously had raised over $150 million in VC funding from Novartis, Advent Venture Partners, Amgen, Boston University Community Technology Fund, Prospect Venture Partners, Tallwood Venture Capital, Venrock Associates, Vulcan Capital and HBM BioVentures. www.ipi.com

VisionCare Ophthalmic Technologies Inc., a Saratoga, Calif.-based developer of visual prosthetic devices for the treatment of age-related macular degeneration, has raised $20 million in Series D funding. Boston Scientific Corp. led the deal, and was joined by return backers Pitango Venture Capital, Onset Ventures, Three Arch Partners and Infinity Venture Capital. VisionCare has raised over $45 million in total VC funding since its 1995 inception. www.visioncareinc.net

AgION Technologies Inc., a Wakefield, Mass.-based provider of engineered anti-microbial solutions, has raised $6.19 million in Series C funding co-led by Motorola Ventures and Paladin Capital Group. The company has raised $36.5 million in total VC funding since its 1997 founding. www.agion-tech.com

MDVIP Inc., a Boca Raton, Fla.-based provider of concierge medicine, has raised $6 million in venture capital funding from Summit Partners. www.mdvip.com

Efficas Inc., a Boulder, Colo.-based biotech company, has raised $3 million in Series A-3 funding. Bay Area Equity Fund led the deal, and was joined by Boston Life Science Venture Corp., the VC arm of the Industrial Bank of Taiwan. www.efficas.com

    Buyout Deals

Charlesbank Capital Partners and Grotech Capital Group have co-led a management buyout of Captain D's Inc., a Nashville, Tenn.-based seafood restaurant chain. The only disclosed financial terms were that Wachovia Capital Markets and Wells Fargo Bank arranged $100 million in senior debt financing. www.captainds.com

KRG Capital Partners has completed a $187 million recapitalization of portfolio company The Tensar Corp., an Atlanta-based provider of technology-driven real estate site development. The deal provides KRG investors with approximately 100% of their invested capital, while still allowing them to maintain their entire stock ownership stake in the company. GE Capital led a syndicate that provided $130 million of senior financing for the recap, while over $77 million in junior debt financing was co-led by Merrill Lynch PCG and American Capital Strategies. www.tensarcorp.com

Weston Presidio and Dorset Capital have acquired a minority stake in Glendale, Calif.-based William Pitt Inc., the parent company of engagement ring maker Robbins Bros., according to The Deal. No financial terms were disclosed. www.robbinsbros.com

Willis Stein & Partners has sponsored a leveraged management recapitalization of Education Corp. of America, which operates for-profit, post-secondary Virginia College. Under terms of the deal, Willis Stein will become ECA's lead investor, with founding investor Prospect Partners retaining a small minority position. No pricing details were disclosed. www.virginiacollege.com

    PE-Backed M&A

Six Apart Ltd., a San Mateo, Calif.-based provider of blogging software and services, has agreed to acquire blogging software provider Live Journal for an undisclosed amount, according to Om Malik's blog. Six Apart is backed by VC firm August Capital. www.sixapart.com

DealerTrack Inc., a Melville, N.Y.-based provider of an online auto finance platform for automotive dealers, has acquired substantially all of the assets of GO BIG! Software Inc., a Longwood, Fla.-based provider of an online menu selling solution for automotive finance and insurance professionals. No financial terms were disclosed. DealerTrack has raised around $50 million in VC funding since its 2001 inception, from firms like GRP Partners and JPMorgan Partners. www.dealertrack.com www.gobigsoftware.com

Conversent Communications LLC and FiberNet LLC, both facilities-based integrated communications providers, have agreed to merge. Each company will retain its respective brand identity in markets that it currently serves. No financial terms were disclosed. Conversent has received VC funding from BancBoston and Seaport Capital, while FiberNet is affiliated with The Blackstone Group, Charter Communications and Fanch Communications Inc. www.conversent.com

Happ Controls LLC of Elk Grove Village, Ill. and Suzo International BV of The Netherlands have agreed to merge, in order to create a global manufacturer and distributor of gaming and amusement parts and accessories with nearly 400 employees. Pfingsten Partners, which acquired Happ Controls last June, will be the combined company's majority shareholder. www.happcontrols.com

    Human Resources

Burrill & Co. has made the following promotions: Giovanni Ferrara to managing director; Richard Haiduck to managing director; James Watson to managing director and head of the merchant banking practice; Bryant Fong to principal; Stephen Kujawa to director; David Hasselwood to senior associate; and Rizwan Velji to senior associate. In addition, the firm named Ann Hanham, John Kim, Roger Wyse, Mike Ullman, John Haag and Tim Young as general partners in the Burrill Life Sciences Capital Fund III, which is slated to hold a first close at the end of Q1 2005. www.burrillandco.com

Frank Panaccio and Jonathan Tower have joined Fidelity Ventures as associates. Panaccio previously worked as an associate in the M&A division of Broadview International LLC, while Tower had been involved in strategic venture and M&A investments for IBM Corporate Development. www.fidelityventures.com

Harald Einsmann, an operating partner with EQT Partners, has joined the board of Checkpoint Systems Inc. (NYSE: CKP). www.checkpointsystems.com

    Firm & Fund News

NeoMed Management, an Oslo, Norway-based life sciences VC firm, has held a 38 million euro first close on its fourth fund. Limited partners include Norwegian fund-of-funds Argentum Fondsinvesteringer, Swedish pension fund Tredje AP-Fonden and UK-based Hoegh Capital Partners. The final fund target is 100 million euros, with subsequent closings expected to occur in a few months. www.neomed.net

Symphony Capital has held a $315 million first close on a pair of private equity funds that will invest in novel biopharmaceutical products. www.symphonycapital.com

Mirae Asset Partners No. 1. Private Equity Fund and Woori No. 1 Private Equity Fund both filed with South Korean financial regulators Monday, making them the first South Korean private equity funds ever to do so. Mirae plans to manage 100 billion won (approx. $96 million), while Woori will manage 210 billion won (approx. $200 million). South Korea recently relaxed its restrictions on locally-owned private equity funds

Ropes & Gray LLP has completed its acquisition of Fish & Neave LLP, a New York-based law firm focused on intellectual property matters. The combined firm features more than 750 attorneys, including 200 working in the IP practice. www.ropesgray.com

Corrections: Vitae Pharmaceuticals Inc. has raised a total of $75 million in VC funding, not $65 million. The company raised an unannounced $10 million insider round last May. Also, The Blackstone Group has a 91.3% pre-IPO position in Celanese Corp., not a 92.6% holding.


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January 5, 2005


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