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    PE Week Wire -- Friday, September 9

Friday Feedback

The sky is gray, the Patriots are back and I’ve got to find some decent clothes for my 4th wedding anniversary dinner tonight. In other words, it’s time for Friday Feedback.

Last Friday’s column on Hurricane Katrina generated an enormous amount of response, which was mostly broken out into three categories: (1) Right on. (2) Stop Bush-bashing/being unpatriotic. (3) It is the local government’s job to protect people, not the federal government’s job. Let’s take them in order (and then get to that VC working in the Astrodome):

Right On: Joshua writes: “Prior to receiving your email this morning, I wrote my Senator to express almost the exact same sentiments. It's shameful and embarrassing and I hope that this is a wake up call for our leaders.” Suzanne: “I have found your writing to be a beautiful blend of political savvy, great humor, dogged investigation and, at times, unbridled personal emotion. Your inclusions are pithy -- right on the money. Today's column exemplifies every reason I read PE Week." Mayer: "I wanted to thank you for your Friday email. Words can't describe the frustration and embarrassment that I feel watching the situation in New Orleans. Your note, however, struck a chord with its poignancy and sentiment.”

Stop Bush-Bashing: Scott writes: "I do not enjoy your frequent political rants and second guessing of decisions by our leaders in this column. I agree that the entire situation in New Orleans is a tragedy. Nonetheless, do you think that John Kerry or a Democratic president would have been able to do anything differently in the current situation? Reading your comments makes it seem like Katrina is another instance of your placing all of our country's (even the world's) problems on George Bush. Give me a break.” Neil: “Shame on you for spreading the word of ‘shame’ and referring to the government. I would think a capitalist like you would realize that it is not the government’s fault… It’s the people stupid. Now, why not just keep your and everyone else’s spirits up by being positive and hopeful instead of whiney and trivial.”

Dan: “With everything unfolding in New Orleans, many media types have used this as an opportunity to trash talk the president, and I am very surprised that you would get in the middle of this. A number of people in this country absolutely despise the current administration, and will try to pin any sort of bad press on them.T his is politics at its worst, you are not trying to help the situation in LA, you are slinging crap just like every other blow heart [sic] out there… There is no doubt that someone screwed up - levies aren't strong enough, evac plan is weak, guns are not in the Walmart safe, etc. Now the government is dealing with the aftereffects - FEMA is doing what they do, the governor has the LA National Guard at his [sic] disposal. For the rest of us, it is not time to play the blame game, it is time for American solidarity - opening our wallets, our homes, etc. People are dying in New Orleans and all Sullivan can do to help them is say that it is Bush's fault - what a patriot."

Constitutional Argument: Vito writes: "I didn’t want to write this email because I don't want anyone to think I am indifferent to the suffering in the Gulf Coast [but] I am writing this email because I find myself annoyed at the response and the direction of blame going on here… Look it up, the federal gov’t was made purposefully weak on domestic issues for the sake of our civil liberties. The task of running the domestic side of things falls to our governors, not our president. Look at education, crime, etc... It's all in the hands of the states but we blame the feds… I don't blame FEMA or Bush for what's going in down south. I blame the governors and the mayors letting chaos happen.”

Note: Very surprised to hear this last argument. It is certainly true from a constitutional perspective, but the Founding Fathers never envisioned a Dep’t of Homeland Security, or necessarily a president whose last campaign revolved around the idea of “I’ll keep you safer than the other guy.” Again, I certainly believe that the NOLA tragedy should be pinned on ALL levels of government, including inept management by Mayor Nagin (school buses?), Gov. Blanco (coordination?) and Pres. Bush (pathetic patronage at FEMA). However, the feds asked for the greatest responsibility when they created a Dept. of Homeland Defense. You can’t ask for responsibility, receive it and then shirk it at a time of crisis.

Finally, VC Evan, who spent last Friday at the Astrodome: “What do you say to someone who has lost everything? As an early volunteer physician yesterday at the Astrodome, I wrestled with this question. Unable to help my colleagues stuck in New Orleans, the next best assistance I could provide was at the Astrodome. Nothing in my medical training prepared me for the scale of what I witnessed. While the sickest patients had been triaged by medical personnel in New Orleans and before they were processed into the Astrodome, on the floor at our medical clinic we were presented with women going into labor, patients that had not had dialysis or insulin in days, patients with infections and unknown bites from wading through the water, and enough patients with chest pain and other acute illness that we had a steady flow of ambulances nearby. I asked one pregnant lady with very swollen legs to elevate her feet with a pillow when lying on her cot. She told me she slept on the concrete the night before. After a fruitless search for a cot, I asked that she at least put a pillow under her legs, to which she replied there are not pillows either.

Another victim, an elderly man, was found incoherent and being attended to by a young boy who lived next to him in New Orleans. When asked where the family was of both victims, the boy told me that they all came together to Houston, but lost each other a day earlier within the masses of people in the arena and had not been able to find each other ever since. Even if victims were fortunate enough to arrive with family, once processed, many lost track of parents and children among the tens of thousands at the dome.

Perhaps the most difficult part of caring for the victims is the inability to treat their deeper wounds—the ones that a bandage and medications can’t repair. Many people were still stunned by the events of the prior days. I saw volunteers holding a crying older woman, consoling her in their arms. As I looked into the children’s eyes I saw their fear and sadness, images that have been seen across the nation. I watched a young mom search desperately though the piles of donated clothes for shoes for her kids—long barefoot since losing their shoes while wading through the water. All had harrowing stories of helicopters, events at the Superdome, and above all else desire to find family members—whether lost in the dome, at another shelter in the region, or still stuck in New Orleans.

Hope came later in the day with word that buses and troops were finally evacuating the rest of the city and more organized relief efforts being provided within Houston to all Hurricane victims. Perhaps some of the best medicine given was the reassurance and hope that things are going to get better. Houston is a city that struggles to meet the healthcare and social needs of the population. We have been able to build three new stadiums but have one of the highest uninsured populations in the country. I found particular irony in the fact that the stadiums have now become the homes and hospitals for so many thousands in need.

While I spend my days working as a healthcare venture capitalist on the business side of medicine, yesterday reminded me that a family physician is who I am and venture capital is just what I do.”

 

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    Top Three

 

Replidyne Inc., a Louisville, Colo.-based drug company focused on anti-infectives, has raised $62.5 million in Series D funding. New backers include Duquesne Capital Management, Healthcare Investment Partners and MDS Life Sciences, while return backers include HealthCare Ventures, TPG Ventures, Morgenthaler Ventures, Perseus-Soros BioPharmaceutical Fund, Sequel Venture Partners, Temasek Holdings and Quintiles Transnational. Aquilo Partners served as exclusive placement agent for Replidyne, which has raised over $122 million in total VC funding since its 2000 inception. www.replidyne.com

Amicus Therapeutics Inc., a Cranbury, N.J.-based drug company focused on genetic diseases like Fabry disease, has raised $55 million in Series C funding. Quaker BioVentures led the deal, and was joined by Palo Alto Inv*stors, the Garden State Life Sciences Venture Fund and return backers Canaan Partners, CHL Medical Partners, Frazier Healthcare Ventures, New Enterprise Associates, Prospect Venture Partners and Radius Ventures. The company has raised $75 million in total VC funding since its 2002 inception, including an $18 million Series B deal in May 2004 at a post-money valuation of approximately $26.5 million. www.amicustherapeutics.com

Audax Group of Boston has closed its second private equity fund with $700 million in capital commitments, and will maintain its focus on leveraged control acquisitions of middle-market companies. Returning limited partners include Harvard Management Co., Massachusetts Institute of Technology, California Public Employees' Retirement System, Pennsylvania State Employees' Retirement System, Commonfund Capital and FLAG Capital Management. New LPs include GIC Special Inv*stment Pte Ltd., University of Virginia Inv*stment Management Co., The Rockefeller Foundation and the State Retirement and Pension System of Maryland. ww.audaxgroup.com

    VC Deals

MetaCarta Inc., a Cambridge, Mass.-based provider of geographic business intelligence solutions, has raised around $10 million in Series C funding. FA Technology Ventures and Hunt Ventures co-led the deal, and were joined by return backers Sevin Rosen Funds, Solstice Capital, In-Q-Tel, Chisholm Private Capital and ChevronTexaco. The company has raised over $17 million in total VC funding since its 1999 inception. www.metacarta.com

Allyes Information Technology Co. Ltd., a China-based provider on online marketing solutions, has raised $30 million in venture capital funding from Oak Inv*stment Partners and IDG Technology Venture Inv*stment, according to The Shanghai Daily. www.allyes.com

Global Silicon Ltd., a UK-based supplier of integrated circuit solutions for consumer electronics, has raised $10 million in new venture capital funding. Quester Capital Management led the deal, and was joined by Celtic House Ventures and return backer MTI Partners. FirstCapital advised Global Silicon on the deal. www.global-silicon.com

Rawflow Ltd., a UK-based provider of P2P streaming software, has raised $4 million in first-round funding from Benchmark Capital Europe. FirstCapital advised Rawflow on the deal. www.rawflow.com

OnRequest Images Inc., a Seattle-based provider of custom imagery services, has raised $8 million in second-round funding. Frazier Technology Ventures led the deal, and was joined by return backer Maveron. The company has raised $12 million in total VC funding since its 2003 inception. www.onrequestimages.com

NemeriX SA, a Switzerland-based provider of GPS chipsets, has raised 25 million euros in Series B funding. Oak Inv*stment Partners and Cadence Design Systems came in as new inv*stors, while return backers included Atila Ventures, Auriga Partners, PolyTechnos Venture Partners and VI Partners. www.nemerix.com

Permabit Inc., a Cambridge, Mass.-based provider of electronic archiving solutions, has raised $12 million in Series C funding led by return backer Baker Capital. www.permabit.com

Quadriserv Inc., a New York-based startup provider of market data solutions to the securities lending industry, is raising $10 million in a VC funding round led by Bessemer Venture Partners, according to a regulatory filing. www.quadriserv.com

Jingle Networks Inc., a Franklin, Mich.-based provider of advertising solutions, has raised $400,000 in Series A funding, according to a regulatory filing. Participants included Lead Dog Ventures and First Round Capital. www.jinglenetworks.com

RPath Inc., a Cary, N.C.-based software company, has raised $6.4 million in Series A funding, according to a regulatory filing. Participants included North Bridge Venture Partners and General Catalyst Partners.

Bioscan Inc. of Washington, D.C. has raised $1 million in bridge financing from Brook Venture Partners. Bioscan produces detection and measurement products and automated chemistry systems used in clinical nuclear medicine and pre-clinical life science research.www.bioscan.com www.brookventure.com

AztecAmerica Financial Services Group Inc., a Berwyn, Ill.-based bank focused on Hispanics living in the Greater Chicago area, has closed on a $12.8 million first-round private equity infusion from unnamed backers. It soon plans to launch a second-round targeted at $25 million. Ramirez & Co. is advising AztecAmerica on both deals. www.aztecamerica.com

    Buyout Deals

KPS Special Situations Fund has completed its acquisition of automotive forging companies Jernberg Industries, Iron Mountain Industries and related entities. The transaction was done with U.S. Bankruptcy Court approval, and includes: $23 million of new equity, $8 million of interim financing, three collective bargaining agreements with the United Steelworkers of America, 30 customer agreements and a new $37 million senior lending facility with LaSalle Bank. The combined entities now will operate under a newly-formed company named Hephaestus Holdings Inc. www.kpsfund.com

AM Media Holdings LLC, an affiliate of ACON Inv*stments LLC, has agreed to acquire two WB-affiliated television stations from Granite Broadcasting Corp. (OTC BB: GBTVK). The total deal – which actually is two separate agreements -- is valued at $180 million, including $177.5 million in cash and $2.5 million of equity in AM Media Holdings. It is expected to close next quarter. The stations being sold are KBWB in San Francisco and WDWB in Detroit. www.granitetv.com

Albertson’s Inc. (NYSE: ABS) has retained Goldman Sachs and Blackstone Group to explore strategic options that could include a sale of all, or part, of the company. www.albertsons.com

NH Hoteles SA of Spain saw its share price rise yesterday amid speculation that The Carlyle Group may be viewing the hotel chain as an acquisition target, in concert with its reported interest in Grupo Occidental Hoteles.

    PE-Backed IPOs

Horizon Lines Inc., a Charlotte, N.C. container shipping company, has set its proposed IPO terms to around 15.63 million common shares being offered at between $15 and $17 per share. It plans to trade on the NYSE under proposed ticker symbol HRZ, with Goldman Sachs and UBS serving as lead underwriters. Castle Harlan acquired Horizon Lines last July from The Carlyle Group, in a transaction valued at $663.3 million. Carlyle had taken control from CSX Corp. as part of a February 2003 recapitalization. www.horizon-lines.com

VistaPrint Ltd., a Bermuda-based holding company for Lexington, Mass.-based graphic design and printing services provider VistaPrint USA Inc., has set its proposed IPO terms to around 10.05 million common shares being offered at between $9 and $11 per share. It plans to trade on the Nasdaq under ticker symbol VPRT, with Goldman Sachs and Bear Stearns serving as lead underwriters. VistaPrint has raised around $76 million in total VC funding since its 1995 inception, with significant shareholders including Highland Capital Partners, HarbourVest Partners, SPEF Ventures, Sofinnova Partners and Window to Wall Street Inc. www.vistaprint.com

Eutelsat SA, a France-based satellite company, is planning a public flotation by late next year that would value the company at between 2 billion euros and 3 billion euros. Shareholders include Texas Pacific Group, Spectrum Equity Inv*stors, GS Capital Partners, Cinven abnd Eurazeo. www.eutelsat.com

    PE-Backed M&A

Apprise Media LLC, a New York-based niche media company, has acquired Y-Visionary LP, an Orange, Calif.–based publisher of nine magazines focused on the automotive aftermarket, outdoor sports and shelter segments. No financial terms were disclosed. Apprise Media is backed by Spectrum Equity Inv*stors. www.apprisemedia.com www.yvisionary.com

JDS Uniphase Corp. (Nasdaq: JDSU) has agreed to acquire Agility Communications Inc., a Santa Barbara, Calif.–based provider of widely-tunable laser solutions for optical networks. No financial terms were disclosed for the deal, which is expected to close by year’s end. Agility has raised over $200 million in total VC funding since its 1998 inception, including a $70 million Series C infusion in 2001 at a post-money valuation of approximately $480 million, and a $91 million Series D infusion in 2002 at a post-money valuation of approximately $255 million. Shareholders include GM Capital Partners, Morgenthaler Ventures, Worldview Technology Partners, U.S. Venture Partners, Tellabs, Siemens Venture Capital, Nissho Electronics Corp., Granite Global Ventures, Meritech Capital Partners, Ciena, Alliance Select Inv*stors, Mitsubishi and London Pacific Assurance Ltd. www.jdsu.com www.agility.com

    Firm News

Blue Point Capital Partners is looking to raise upwards of $500 million for its second fund, according to a regulatory filing. It’s previous fund was capped at $410 million in 2001. www.bluepointcapital.com

Sigma Partners has closed its seventh fund with $400 million in committed capital, as first reported by VentureWire.

The Aurora Funds of Durham, N.C. has held a $50 million first close on its fifth fund, which will focus on early-stage life sciences and information technology companies. The firm also promoted Jan Bouten to the role of senior associate. www.aurorafunds.com

Lexington Partners is raising upwards of $3 billion for its sixth general secondaries fund, according to a regulatory filing. www.lexingtonpartners.com

Versant Ventures soon will begin raising its third fund with a $400 million target, according to VentureWire. www.versantventures.com

    Human Resources

Harvard Management Co. lost its top pick to succeed Jack Meyer as CEO, when Bain Capital managing director Mark Nunnelly opted not to take the job, according to The Boston Globe. Meyer will leave at the end of this month to launch a new asset management firm.

Jing Huang has agreed to join Bain Capital to head up a new Beijing-based operation named Bain Capital China, according to Private Equity Insider. He previously was a managing director with SAIF Ventures, which recently closed a new $630 million fund.

Paul Bialek, former CFO of RealNetworks, has joined Frazier Technology Ventures as a general partner, according to multiple press reports. www.fraziertechnology.com

Claude Charles, former chairman of Equinox Group Holdings, and Johnson Tan, a partner with IB Capital, have joined the board of Pacific Internet Ltd. (Nasdaq: PCNTF). www.pacnet.com

 

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September 9, 2005















 





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