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pe week wire

 PE Week Wire - Wednesday, January 7

Random Ramblings


No lengthy column this morning, as there were more than 35 news items to discover and type up. I really do wish some of you would live up to that slowdown you keep yammering on about… But since I hate leaving you empty-handed, a trio of very quick items:


*** Say goodbye to Wallstrip. The finance-focused video blog has not produced a new episode since Dec. 12, and this is no extended holiday break.


A source familiar with the situation says that Wallstrip owner CBS Interactive plans to “take the DNA from WallStrip and apply it" to fellow CBS property BNet. No word on if that DNA includes current WallStrip host Julie Alexandria, or past host Lindsay Campbell (whose subsequent CBS show MobLogic also hasn’t published since Dec. 12).


CBS had acquired WallStrip for $5 million in May 2007, from a group of angels that included Fred Wilson. Hopefully they'll at least put together a farewell episode...


*** Jodi Sherman Jahic has left venture firm Voyager Capital, after a seven-year run that saw her run the firm’s wireless sector practice. She now will serve as a fulltime managing director with Sherman Capital Group, which she says is focused on “bootstrapped and cash-flow opportunities that need less capital than the typical venture capital model requires.”


It’s a family business in that Jodi’s partner and firm co-founder is her father Steven Sherman, but the group’s money comes from outside investors.


*** Answer Key: On Monday I asked: How is the Indymac buyout similar to the SunGard buyout? You hint was to think timing and due diligence.


The answer is that, in both cases, THL Capital pulled out at the final moments and was almost immediately replaced by new money. In the case of SunGard, THL and Carlyle bailed over price, and were replaced with $500 million checks from Providence Equity Partners and Goldman Sachs. In this case, THL pulled out about two weeks before the final bid was submitted – and was replaced by J.C. Flowers, a Soros affiliate and Stone Point Capital (none of which had been part of the original Dune/Paulson group).

New at peHUB

* First Read, including the hot IPO no underwriter will touch, and JibJab's Year in Review.


* Second Opinion, the clues to Equitty Private's identity and the best box of crackers ever.


* At least $6 billion worth of SPACs will hit their "play or fold" deadlines this year. Erin wonders what they're going to do.


* UK private equity deals hit lowest quarterly total in 13 years.


* Chris Bulger looks at the 2008 buyout-backed bankruptcy list, and notices that none of the busts were from the technology sector. Does this mean tech buyouts were better?


* Q&A with Tacoda founder Dave Morgan, about what's next for online advertising.


* Bernard checks the progress of CapitalSouth's fund-raising drive.


* Shades of 1929: Another financier kills himself.


* Will Innkeepers USA be the next Apollo bust?


* A couple lengthy and insightful comments on yesterday's Cash4Gold piece.


* Welcome to Ponzi-Town: When laid-off bankers have too much time on their hands, they begin rapping about Madoff and Libor on YouTube.



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  Top Three


Anacor Pharmaceuticals Inc., a Palo Alto, Calif.-based developer of topical therapeuticals, has raised $50 million in Series E funding. GlaxoSmithKline and Schering Corp. were joined by return backers Rho Capital Partners, Venrock Associates, Care Capital and Aberdare Ventures. The company raised around $37 million, and had filed for a $57.5 million IPO in August 2007. Read more…


Daewoo Electronics creditors have ended talks to sell the South Korean company to Ripplewood Holdings, and instead plan to look at restructuring options. Read more…


Bank of America has agreed to sell part of its stake in China Construction Bank for $2.83 billion. Read more…



15th Annual Venture Capital and Private Equity Conference
Creating Value in Changing Markets
organized by the Venture Capital & Private Equity Club, Member of the Student Clubs of HBS, Inc.

Harvard Business School
Saturday, January 31st, 2009

The conference brings together students and industry leaders from across the country to discuss the latest trends in Venture Capital and Private Equity.

Keynote speakers include: David M. Rubenstein of The Carlyle Group, David Skok of Matrix Partners and Steven B. Klinsky of New Mountain Capital

Platinum Sponsors: Ernst & Young LLP, Goodwin Procter LLP and
Kirkland & Ellis LLP.

Register now to take advantage of the early bird pricing:


   VC Deals

Synosia Therapeutics, a Swiss drug developer focused on psychiatry and neurology, has raised CHF 32 million ($29m) in Series B funding. Aravis Venture and Investor Growth Capital co-led the round, and was joined by Swiss Helvetia Fund and return backers Versant Ventures, Abingworth, Novo A/S and 5am Ventures. Read more…

Anaphore Inc., a developer of protein therapeutics to address cancer and immune-mediated diseases, has raised $25 million in Series A funding, according to VentureWire. The round includes an $8 million seed funding that closed last March, while the remainder closed in December. Apposite Capital was joined on the second tranche by seed backers 5am Ventures and Versant Ventures.

FORMA Therapeutics, a Cambridge, Mass.-based small molecule drug developer with an initial focus on cancer, has raised $25 million in non-dilutive Series A funding. Backers include Novartis Option Fund and Bio*One Capital. Read more…

ClickSquared Inc., a Waltham, Mass.-based interactive relationship marketing firm, has raised $11 million in Series B funding. Backers include JMI Equity, ABS Ventures and Flybridge Venture Capital. Read more…

RatePoint Inc., a Needham, Mass.-based provider of a quality-assurance certification and customer feedback platform, has raised $10 million in Series B funding. Castile Ventures led the round, and was joined by return backers .406 Ventures and Prism VentureWorks. The company had previously raised $6.5 million. Read more...

Sentilla Corp., a Redwood City, Calif.-based provider of demand-side energy management solutions for commercial and industrial facilities, has raised $7.5 million in Series B funding. Onset Ventures and Claremont Creek Ventures co-led the round. Read more…

Qwell Pharmaceuticals, a Seattle-based drug developer focused on tumors and excess inflammation of skin cells, has raised $7 million in Series A funding, according to Xconomy. Arch Venture Partners and the Wellcome Trust co-led the round. Read more…

TheInfoPro, a New York-based provider of market intelligence for the IT industry, has raised $7.25 million from Edison Venture Fund. Read more…

Intradigm Corp., a Palo Alto, Calif.-based developer of RNAi therapeutics, has raised $2.9 million in additional Series B funding, bringing the round total to $21.4 million. Astellas Venture Management led the tranche, with existing backer Lilly Ventures also participating. Other participants on the first tranche included Roche Venture Fund, MP Healthcare Venture Management, Frazier Healthcare Ventures, Alta Partners, MediBic Alliance Technology Fund and Novartis Venture Fund. Read more…


FirstDocs Inc., a Westwood, Mass.-based legal process automation company, has raised an undisclosed amount of funding from Foundry Group. Read more…

The 15th Annual Columbia Business School Private Equity
and Venture Capital Conference

January 30th, 2009 - Alfred Lerner Hall
Columbia University - New York, NY

Register now at

             Featuring keynote speakers:
             J. Christopher Flowers, Founder - J.C. Flowers & Co.
             Robert Pittman, Founder - The Pilot Group


  Buyout Deals


CIVC Partners has acquired Goldline International Inc., a Santa Monica, Calif.-based precious metals trading company, for over $50 million. Company management also participated. Read more…


ICV Capital Partners has sold Sterling Foods Ltd., a San Antonio, Texas-based provider of specialty bakery products, to TGF Management. No financial terms were disclosed. Read more…


Rockbridge Growth Equity has acquired Northcentral University, a Prescott Valley, Ariz.-based online university with around 7,500 current students. No financial terms were disclosed. Rockbridge was advised on the deal by Berkery Noyes. Read more…


Standard & Poor's Ratings Services has lowered the corporate credit ratings of Aleris International Inc. from B to CCC+, and left its ratings on CreditWatch with “negative implications.” The Beachwood, Ohio-based aluminum products company was acquired by TPG Capital in 2006 for approximately $3.3 billion.


Vector Capital is nearing a deal to acquire Israeli security software company Aladdin Knowledge Systems (Nasdaq: ALDN), according to TheMarker website. The company’s shares rose 37% to $9.62 per share on the news, which comes months after Aladdin rejected a $13 per share offer from Aladdin.


Apollo Management reportedly is among the largest creditors of Lyondell Chemical Co., a global petrochemical company whose U.S. operations filed for bankruptcy protection yesterday. Read more…

  PE Exits


CA Inc. (Nasdaq: CA) has agreed to acquire Orchestria Corp., a New York-based provider of data loss prevention technology. No financial terms were disclosed. Orchestria has raised around $50 million in VC funding since 2002, from firms like Doughty Hanson & Co., Benchmark Capital, Constellation Ventures, CrossBridge Venture Partners, Goldman Sachs, New York City Investment Fund and Paladin Capital Management. Read more…

  PE-Backed M&A 


Bright Horizons Family Solutions, a Bain Capital portfolio company, has acquired Work Options Group Inc., a Boulder, Colo.-based provider of back-up care solutions for both children and elders. No financial terms were disclosed. Read more…


Hub International Ltd., a Chicago-based insurance brokerage, has acquired the assets of Gemini Group Inc., a Denver-based employee benefits broker and consultant. No financial terms were disclosed. Hub was taken private in 2007 for $1.8 billion by Apax Partners and Morgan Stanley Principal Investments. Read more…


FleetPride, an independent aftermarket distributor of heavy-duty truck and trailer parts, has acquired E.H. Burrell Co., a wholesale distributor of parts and accessories for commercial trucks and heavy equipment. No financial terms were disclosed. FleetPride is owned by Investocrp, Banc of America Capital Investors and company management. E.H. Burrell Co. was advised by The March Group. Read more…


SolarWinds, an Austin, Texas-based provider of network management software for the SMB/SME market, has acquired the tech products and development team of New Zealand-based Kiwi Enterprises. No financial terms were disclosed. SolarWinds is in registration for a $250 million IPO, and has raised around $48.5 million in VC funding from Bain Capital Ventures (31.6% pre-IPO stake), Insight Venture Partners (31.6%) and Austin Ventures (3.4%). Read more…


Synchronous Aerospace Group, a portfolio company of Littlejohn & Co., has acquired Helicomb International Inc., a Tulsa, Okla.-based provider of aerospace composite structures. No pricing terms were disclosed for the deal, which included equity financing from Littlejohn and debt financing from Jefferies Finance. Read more…


United Road Services Inc., a Romulus, Mich.-based provider of vehicle transportation and logistic services, has acquired Autolog Auto Transport, a Linden, N.J.-based vehicle logistics provider. No financial terms were disclosed. United Road is owned by The Gores Group. Read more…


Yellowstone Landscape Group, a portfolio company of Gridiron Capital, has acquired Austin Outdoor, a Bunnell, Fla.-based provider of landscaping services in Florida and The Bahamas. No financial terms were disclosed. Read more…


  Firms & Funds


China and Belgium plan to raise around 3 billion yuan ($440m) for their second joint private equity fund to focus on small Chinese companies, according to sources. Read more…


Gunflint Capital has launched as a new boutique I-bank based in Edina, Minnesota. It is run by Bill Cavanagh, who previously was a principal with Counsel Funding Partners and a vice president with Bayview Capital. Read more…

Monitor Clipper Partners has closed its third buyout fund with $500 million in capital commitments, according to LBO Wire. It had been targeting $800 million.

Pfingsten Partners of Chicago has formed Sangamon Industries LLC, a special purpose vehicle that will make investments in underperforming or distressed manufacturing and distribution businesses. The move is concurrent to Pfingsten beginning to invest out of its $525 million fourth fund, which closed in Q2 2008. Read more…

  Human Resources

Joe Marren has left Sagent Advisors, where he had been a managing director since 2005. peHUB has learned that he has formed a new firm called K Stone Partners, where he’ll serve as president and CEO. No details on K Stone have been disclosed. Prior to joining Sagent, MArren was global head of M&A business development for Citigroup. 


Kent Carstater has joined Stifel, Nicolaus & Co. as a managing director in the firm’s Financial Institutions practice. He previously was with Resource America Inc., where he served as president of a private equity subsidiary. Read more…


Paul Dickerson has joined Pegasus Capital Advisors as an operating advisor. He is the former COO of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy. Read more…


Alex Edwards has joined the Shanghai office of placement agent C.P. Eaton Partners, as a vice president leading expansion into Australia, New Zealand and South Asia. He previously was with Franklin Templeton Investments in Hong Kong and London. Read more…


Bob Ennis has joined Petsky Prunier LLC to lead the firm’s digital media practice. He previously was founder and president of Tensor Advisors and, before that, was a vice president of IAC/InterActiveCorp.

Stacy Feld has joined Physic Ventures as a director. She previously was an associate director of business development with Genetech Inc.

Grant Jackson has joined Council Ventures as a general partner. He previously was a partner with The Aurora Funds, where he focused on healthcare services and healthcare IT opportunities. Read more…


John Paul McGrath has joined Close Brothers as a managing director focused on expanding the firm’s European financial services coverage into the UK. He has spent the past nine years with NM Rothschild & Sons. Read more…


Mark Watt has joined America’s Growth Capital as a partner in the firm’s Menlo Park investment banking group. He previously was a director of technology I-banking with Merrill Lynch. Read more…

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