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    PE Week Wire -- Friday, June 16

And The Nominees Are...

The first presidential primary is more than 19 months away, which means that it is time for my endorsements. Consider this remuneration for all the times I’ve been tardy with other things. So, without further do, I officially endorse Mitt Romney for the GOP nomination and Mark Warner for the Democratic nomination.

These men have not been selected because they are their respective party’s most qualified candidates (they aren’t) or because they are their party’s most electable candidates (although Warner may be), but rather because they both built their initial campaign warchests with private equity riches. Romney was the founder of Bain Capital before his current part-time gig as governor of Massachusetts, while Warner helped launch Columbia Capital before recently serving as governor of Virginia.

In other words, these are self-serving endorsements whose realization could someday help me land a book deal or – even better – a guest appearance on C-Span. Or maybe both (fingers crossed). So while we wait for Romney to wreck McCain and for Warner to wallop Hillary, let’s take a quick look at the other PE-related folks currently running for office. It should go without saying that I also endorse each one of them:

Chris Gabrieli
Democratic candidate for Massachusetts Governor
Gabrieli is a venture partner with Bessemer Venture Partners and also co-founder of an SBIC called Ironwood Equity Partners. I previously wrote about him here. As an update, Gabrieli barely made it onto the Democratic primary ballot, after a last-minute push for delegates at the State Democratic Convention last month. But he’s there, and the sophomoric “he’s trying to buy the election” critics are already out in full force. If Chris could buy an election, he would have won his Congressional race in 1998.

Marc Holtzman
Republican candidate for Colorado Governor
Holtzman in the late 1980s moved to Eastern Europe to help finance companies in countries emerging from communist control. The eventual outcome (after some political scandal) was EurAmerica, a private I-bank that raised equity and debt capital for such companies, and which also advised on M&A transactions. He and his partners eventually sold it to ABN Amro, and Holtzman returned to Colorado. His competition for the GOP gubernatorial nomination is current Congressman Bob Beauprez, with Holtzman considered the underdog.

Ned Lamont
Democratic candidate for U.S. Senate from Connecticut
Ok, Lamont is only here because he's married to Annie Lamont of Oak Investment Partners, but the list was running a bit light. He is still behind Joe Lieberman in the polls, but is a lefty darling who has caused Joe-mentum to consider running as an independent.

Tim Mahoney
Democratic candidate for Florida’s 16th Congressional District
Mahoney is a co-founder of vFinance Inc., a $1 billion provider of financial services in the retail brokerage, I-banking and institutional services business. He also is founder and president of The Center for Innovative Entrepreneurship. Mahoney is expected to win his party’s nomination, but could have an uphill battle against incumbent Mark Foley.

William Weld
Republican candidate for New York Governor
Oops, not anymore. The former Mass. governor and Leeds Weld & Co. partner quit last week after staging what The Boston Globe called a "quixotic" campaign. Specifically, Weld was dogged by his firm’s investment in Decker College, a for-profit Kentucky institution for which he also served as interim CEO. The school collapsed after allegedly stealing government funds designated for student aid (among other things), and Weld was left in the following Catch-22: Either he didn’t know what was going on, and was therefore an absentee CEO; or he participated in the fraud and was therefore culpable. Either way, NY voters didn’t want him running their state.

If there is anyone I missed, please let me know. Otherwise, have a great weekend…

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    Top Three

VLST Corp., a Seattle-based developer of therapeutics for autoimmune and inflammatory disorders, has raised $55 million in Series B funding. TPG Ventures led the deal, and was joined by MedImmune Ventures, WRF Capital and return backers MPM Capital, Arch Venture Partners, OVP Venture Partners and Amgen Ventures. The VLST platform uses bioinformatics and proteomics to identify viral genes whose protein products function as immunomodulatory agents.

Venevision, a Venezuelan broadcaster controlled by the Cisneros family, has joined the auction for Spanish-language television broadcaster Univision (NYSE: UVN). Gustavo Cisneros said that the group – which already is a large Univision shareholder – has joined an existing consortium of Bain Capital, Blackstone Group, Carlyle Group, Cascade Investment, KKR and Grupo Televisa. An alternate consortium is reported to include Haim Saban, Madison Dearborn Partners, Providence Equity Partners, Texas Pacific Group and Thomas H. Lee Partners. The deal is expected to be worth around $12 billion.

GMP Capital Trust (TSX: GMP.UN) has agreed to acquire Canadian private equity firm EdgeStone Capital Partners. The deal is valued at approximately Cnd$155 million, including Cnd$62 million in cash. All of EdgeStone's key employees have committed to multi-year employment agreements and will retain a substantial majority of their carried interest entitlements in EdgeStone's funds. The remainder of carried interest will be held by GMP. The deal is expected to close next month.

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    VC Deals

Enpirion Inc., a Bridgewater, N.J.-based provider of integrated power solutions, has raised $18 million in Series C funding, according to a regulatory filing. BA Venture Partners was joined by return backers like Canaan Partners, Columbia Capital and RRE Ventures.

Crocus Technology, a France-based provider of magnetic random access memories (MRAM), has raised $17 million in Series A funding. Sofinnova Ventures led the deal, and was joined by Ventech, CDC Entreprises Innovation, AGF Private Equity, Sofinnova Partners and NanoDimension.

Chelsio Communications Inc., a Sunnyvale, Calif.-based provider of 10 gigabit Ethernet adapters, has raised $12 million in Series D funding, according to a regulatory filing. Return backers include New Enterprise Associates, Global Catalyst Partners and Sequoia Capital.

Gaia Interactive Inc., a San Jose, Calif.-based virtual space "hangout" geared towards young people, has raised around $8.93 million in new VC funding, according to a regulatory filing. Backers include Benchmark Capital and Redpoint Ventures.

RF Code Inc., a Mesa, Ariz.-based developer of hybrid RFID data management software, has raised $6.2 million in Series C funding from return backers like QuestMark Partners, according to a regulatory filing.

eStyle Inc. (a.k.a., a Los Angeles-based online retailer for pregnant women and new mothers, has secured $6 million of an $8.53 million Series 1 round. Return backers include Oak Investment Partners and Global Retail Partners. The company has raised over $120 million in total VC funding since its 1998 inception.

Nascentric Inc., an Austin, Texas-based provider of design automation tools for semiconductor companies to analyze and optimize their designs, has secured $6.2 million of a $6.6 million Series B round, according to a regulatory filing. Return backers include Austin Ventures and Silverton Partners.

Vurv Technology Inc. (f.k.a. RecruitMax Software), a Jacksonville, Fla.-based provider of workforce management solutions, has raised $5 million in third-round funding, according to a regulatory filing. Return backers include QuestMark Partners and Tudor Ventures.

iArchives Inc., a Lindon, Utah-based provider of document digitization and conversion services, has raised around $2 million in Series A funding, according to a regulatory filing. Backers include Canopy Ventures and Century Capital Partners.

    Buyout Deals

Macquarie Capital has agreed to acquire tire-inflation equipment maker ASI Holding Corp. from Wind Point Partners for $420 million.

Intel-Tel (Nasdaq: INTL) has received a $22.50 per share buyout offer from Vector Capital and Steven Mihaylo, the company’s former and former CEO. The deal values Intel-Tel at around $600 million.

BCE Inc. is in talks to sell its Telesat Canada commercial satellite unit to a private equity consortium that includes Ontario Teachers’ Pension Plan, according to The Globe & Mail. The deal could be valued at around Cnd$3 billion.

Group GTI, a UK–based provider of career information and online applications systems to graduates and post-graduates in Europe, has raised an undisclosed amount of private funding from Exponent Private Equity and Barclays Bank.

First Reserve Corp. has agreed to acquire Ohmstede Ltd. from Tanglewood Investments for an undisclosed amount. Ohmstede is a Beaumont, Texas–based manufacturer of engineered shell and tube heat exchangers in North America, as well as replacement tube bundles, parts, and aftermarket shop repair. Harris Williams acted as exclusive advisor to Ohmsted on the transaction, which is expected to close during the third quarter.

Providence Equity Partners has completed a leveraged recap and growth equity financing for Pluris Inc., a Framingham, Mass.-based provider of database marketing and consumer segmentation technologies. No financial terms were disclosed. Revolution Partners represented Pluris on the deal.

Coastal Carolina Clean Power, an affiliate of the Carlyle/Riverstone Renewable Energy Infrastructure Fund I, has acquired a biomass-fired cogeneration facility in Kenansville, N.C. from United Cogen Fuels LLC. No financial terms were disclosed. As part of the deal, Carlyle and Riverstone have hired Rollcast Energy Inc. to manage the facility under a long term contract, on behalf of CCCP.

Checkers Drive-In Restaurants (Nasdaq: CHKR) shareholders have voted in favor of a $15 per share public-to-private buyout by Wellspring Capital Management. The total deal is valued at approximately $188 million, including the assumption of debt.

    PE-Backed IPOs

Houston Wire & Cable Co., a Houston, Texas-based provider of specialty wire and cable to the U.S. electrical distribution market, priced 8.5 million common shares at $13 per share ($12-$14 range), for an IPO take of approximately $110.5 million. It is trading on the Nasdaq under ticker symbol HWCC, while William Blair & Co. and BB&T Capital Markets served as co-lead underwriters. Code Hennessey & Simmons acquired the company in 1997, and held a pre-IPO majority position.

    PE-Backed M&A

Symphony Services Corp., a Palo Alto, Calif.-based provider of provider of tech-based outsourcing solutions, has acquired VMOplus, a Boston-based consulting company that helps organizations develop and optimize their global and distributed programs. No financial terms were disclosed. Symphony raised $20 million in a 2003 VC round from TH Lee Putnam Ventures

Welocalize Inc., a Frederick, Md.-based provider of software localization and testing services, has agreed to merge with M2 Enterprises, a Montgomery Village, Md.–based provider of multimedia and publishing translation services. No financial terms were disclosed. Welocalize raised $6 million in a 2000 VC funding round led by LLR Partners.

    Firm & Fund News

Baker Brothers Investments has raised around $252 million for a fund focused on life sciences companies, according to a regulatory filing. Limited partners include The University of Chicago, the Howard Hughes Medical Institute and Princeton University.

    Human Resources

Jun Tsusaka has joined Texas Pacific Group as a Tokyo-based partner focused on building local operations and guiding the firm’s strategic direction in Japan. He previously served as co-founding partner of Brera Capital.

Didier Bismuth has joined Duke Street Capital as a partner in the firm’s French office. He has spent the past 11 years with Apax Partners France.

David Petrucco has joined The Blackstone Group as a managing director of capital markets in the firm’s corporate debt group. He previously was with RBS Securities as a managing director and head of loan syndication/capital markets for North America.

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June 16, 2006

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