Random Ramblings

I spent an ungodly portion of yesterday discussing the Chryslerus deal with various reporters — the majority of whom know fairly little about private equity. This is not a knock on them, as it isn’t their area of expertise, but the result was numerous questions about how many people Cerberus plans to layoff (answer: check the existing Chrysler restructuring plan) or if it will cash out within a few months via a dividend recap (answer: maybe a little, but the term “cashing out” is a BIG oversimplification).

The question everyone should be asking is this: What does Cerberus know that the rest of us don’t?

Specifically,does it have some handshake agreement with the UAW in regards to the upcoming contract negotiations? UAW gave the thumbs-up yesterday (which means the buyout will almost certainly get done), but that’s the easy part. The hard part comes when the two sides have to sit across a bargaining table that also includes Ford and GM. Two is still more than one (among the Big 3), which means that any tacit Chryslerus agreement could be rendered moot.

There’s probably a good answer out there, but I’m sure glad I’ve been getting asked different questions.

*** Speaking of Chryslerus, it was the lead story on yesterday’s NBC Nightly News. The lead by CNBC’s Phil LeBeau was an accurate representation of private equity, whereby he said that most PE firms are aggressive with their investments, and sometimes break up companies. But then they played this brief and bewildering comment from Casaba Csere, editor-in-chief of Car & Driver:

“You worry about a private equity group coming in, because this is not a simple business. The amount of money you need to invest in the car business is enormous, the lead time is long.”

My wife then turned to me and remarked sarcastically: “Yeah, because private equity only invests in the simple companies.” If my wife – a woman who proudly pays little attention to what I cover -- could immediately spot the absurdity of Csere’s statement, why couldn’t some editor at NBC?

*** The Canada Venture Capital Association will release Q1 venture capital and buyout data at 10:30am ET. I’ve got it, and will post to peHUB once the embargo lifts.

*** I’ve been considering a piece on Elevation Partners, which has only closed three deals since closing its $1.8 billion debut fund in 2004. The working title is What the Hellevation? My basic interest isn’t why a firm with so little activity has received so much press attention (over 1,000 print mentions to date), as the obvious answer is Bono. Instead, I was more interested if LPs were getting nervous about the seemingly-slow pace.

The results so far have been inconclusive, for two reasons. First, the nascent portfolio actually represents a significant portion of Elevation’s capital under management – in part because two of the deals are platform companies. Specifically, it committed an estimated $300 million to a joint media venture with Forbes (in exchange for a minority stake in the publisher), and made a $300 million commitment to video game publisher BioWare/Pandemic Studios. It’s first deal was a $100 million PIPE deal for Move (Nasdaq: MOVE). All together, that’s $700 million of a $1.8 billion fund, or around 39 percent. Kind of like the heavy-concentration strategy employed by Garnett & Helfrich Capital.

Oh, reason number two: LPs usually give new partnerships at least three years to get things together. Those who did express some mild concern with Elevation’s pace – particularly given its inconsistency with the market-at-large – said that it was still a bit too early to bring issues to the fore…

*** I reported in January that Golden Gate Capital was raising an annex fund to its second fund raised in 2004, and that it would then employ an evergreen structure for its third official vehicle. Well, GGC has quietly closed the annex fund with $614 million, and is indeed making evergreen plans. Details at peHUB.

*** Yes, my corporate overlords have agreed to buy Reuters. No, I have no idea what it means for me or this product. Fingers crossed for a net positive.

*** Not only is there rampant insider trading prior to public M&A deals, but it’s far more pronounced when a private equity firm is the buyer.

*** Fred Wilson is not commenting on reports that CBS is buying Wallstrip, except to say that the reporters got his involvement way wrong. Oh, and if you haven’t already, read Fred’s Anti-VC post (particularly the comments section).

Intrexon Corp., a Blacksburg, Va.-based developer of transcriptional therapeutics, has raised $25 million in Series C funding from New River Management (managed by Third Security). www.intrexon.com

Avail Media Inc., a Reston, Va.-based provider of IPTV and other media services to broadband operators, has raised $17 million in Series B funding. Novak Biddle Venture Partners and Columbia Capital co-led the deal, and were joined by return backers like Pioneer Investors and the Benaroya Companies. VentureWire pegs the post-money valuation in excess of $33 million. www.availmedia.com

Fanfare, a Mountain View, Calif.-based provider of testing solutions for companies developing high-tech equipment, has raised $12 million in Series C funding at a $54 million post-money valuation. Focus Ventures led the deal, and was joined by return backers Matrix Partners and Redpoint Vetures. Fanfare previously had raised around $13.2 million in VC funding since its 2004 inception. www.fanfaregroup.com

Arch Rock Corp., a San Francisco-based developer of wireless sensing and control products, has raised $10 million in Series B funding. New Enterprise Associates led the deal, and was joined by fellow return backers Intel Capital and Shasta Ventures. Arch Rock had raised a $5 million Series A round in late 2005. www.archrock.com

MySupermarket Ltd., a London-based price comparison website for groceries, has raised $6 million in venture funding from Greylock and Pitango Venture Capital. www.mysupermarket.co.uk

Quanlight Inc., a San Diego-based LED startup, has raised $3 million in Series B funding from Blackbird Ventures, (SHW)² Enterprises and individual angels www.quanlight.com

Kyte.tv, a San Francisco-based provider of interactive television technology, has raised an undisclosed amount of second-round funding co-led by Swisscom and Holtzbrinck Ventures. The deal also includes European angels Klaus Hommels, Oliver Jung, and Peter Schupbach. Kyte.tv previously had raised funding from Atomico, Draper Fisher Jurvetson and Ron Conway. www.kyte.tv