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Weekly Deals and Funds Roundup: 6 July 200506/07/2005. Source: AltAssets. 
 A selection of the latest deal and fund news from across the globe - essential reading for those who need to keep up-to-date with the industry's key developments.
FUNDS
Flywheel Ventures, a US Southwest-based early-stage venture capital firm, has announced the final close of its first institutional venture capital fund, Flywheel I, L.P. The $31m fund, with 75 per cent of committed capital from institutions, will invest in seed and early-stage information technology and physical sciences ventures located primarily in New Mexico, Colorado and Arizona.
Participating investors include the Kauffman Foundation, New Mexico State Investment Council, the McCune Foundation, Hunt Holdings, the New Mexico Small Business Investment Corporation and the New Mexico State University Foundation.
Trevor Loy, Flywheel's Managing Partner said "We are very gratified by the strong institutional support for Flywheel I, L.P. We believe that there is a significant early-stage funding gap relative to the rich technology and economic potential of the Southwest / Rockies region. Our team will continue to leverage our on-the-ground presence and start-up experience with our Silicon Valley connections to build successful businesses."
SAM Private Equity has been awarded the management of the direct venture capital portfolio of Ontario Power Generation. The portfolio, consisting of nine direct energy technology investments based in North America and Europe and held by OPG Ventures Inc., OPG's venture capital subsidiary, has a total volume of about 40m Canadian dollars.
Crescent Mezzanine has announced that it has joined forces with Canterbury Mezzanine Capital. Canterbury principals Patrick Turner, Nicholas Dunphy, Joseph Kaufman, Daniel Honeker and Andrew Bernstein have joined TCW/Crescent as partners. Effective immediately, Canterbury will enter the market as TCW/Crescent and will be the firm's New York office.
"TCW and Canterbury have long shared similar philosophies and investment strategies, with an emphasis on credit-driven analysis and sponsored deals," says TCW Group Managing Director and CEO of TCW/Crescent Mezzanine, Jean-Marc Chapus. "TCW/Crescent's core investment philosophy will remain, but we will move forward with enhanced market coverage, a deep and talented team and strong continuity."
DEALS
American Capital Strategies has announced it has invested an additional $13m in its portfolio company Montana Silversmiths Inc. to support its acquisition of Big Sky Carvers LLC, a manufacturer and distributor of outdoor and lodge-themed woodcarvings, home accents and collectibles. Thompson Street Capital Partners is the majority owner. BSC management is rolling over their equity investment.
Segulah III, L.P. has acquired Skanska Prefab Mark from Skanska. Skanska Prefab Mark AB is a Swedish firm manufacturing and selling pre-fabricated products in concrete for sewage, drainage and paving. The company has seven manufacturing sites in Sweden. In 2004 the company generated MSEK 400 in revenue and more than MSEK 50 in earnings. Skanska Prefab Mark is one of several non-core businesses, which Skanska has decided to divest.
Lightyear Capital has announced it has sold its controlling interest in Ripon Cogeneration LLC to Countryside Power Income Fund in a transaction valued at $96m. Lightyear Capital, along with its management partners acquired Ripon from Tractebel Power, Inc, a subsidiary of Suez SA in January 2004. Ripon is an owner and operator of two gas-fired cogeneration plants in California powered by General Electric combustion turbines.
Yellowstone Capital has announced the sale of Grayloc Products to Oceaneering International, Inc. (NYSE:OII). The purchase price was approximately $41m, subject to a post-closing working capital adjustment. The sale was executed by its affiliate, Yellowstone Energy Products, LP and Grayloc's management team. Grayloc is a manufacturer of high performance clamp connectors primarily for the oil & gas and process industries.
Reiten & Co Capital Partners VI L.P has entered into an agreement to purchase a 67 per cent majority interest in Euroskilt AS, a traffic safety products company with operations in Norway, Sweden, Denmark and Poland. The founders will continue as minority shareholders in Euroskilt. The NOK 92m (c. €12m) investment has been structured as a purchase and share issue with warrants enabling the company to fund add-on acquisitions and organic growth.
3i has announced the sale of its minority stake in Zenith, one of the UK's largest independent vehicle leasing companies to Dunedin Capital Partners, in a total deal worth £27m.
3i originally backed the MBO of Leeds-based Zenith in February 2004 when it invested £6.5m. 3i will receive proceeds of £12m and will generate an IRR of 80 per cent.
Phil Greves, 3i investment director, commented: "This has been an excellent investment for 3i, backing a first-rate team and a great business. Since our investment, the company has seen strong growth and has recently won major new contracts with BUPA and Remploy".
The Riverside Company - a private equity firm specialising in investments at the smaller end of the middle market - has acquired A&C, Inc. A&C is an add-on to United Central, a platform company acquired by Riverside in August 2004 and the largest, full-service distributor of consumable coal mining supplies in the United States.
Founded in 1987, A&C is the largest distributor of General Cable's (NYSE:BGC) Anaconda electric mining cable and the primary distributor of Anaconda mining cable in Central Appalachia (West Virginia, southwestern Virginia, and eastern Kentucky).
ABN AMRO has entered into an agreement to acquire Priory Group from private equity firm Doughty Hanson & Co for a total equity and debt consideration of €1.29bn. Priory Group is the UK's leading providers of mental healthcare and specialist education services, operating 1,700 beds across a network of 40 facilities, comprising hospitals, care homes, specialist care facilities and specialist educational facilities.
ABN AMRO has fully underwritten the equity and debt for the acquisition and will provide re-financing via a debt package that delivers optimal funding for Priory Group, based on its cash flow projections, working capital needs and Capex plans. Equity co-investors will be able to participate via direct co-investment opportunities and/or through a fund in due course.
Actis, a private equity investor in emerging markets, and Comafin, a pan-African private equity fund, have jointly sold their 37.5 per cent stake in Protea Hospitality Corporation to a black economic empowerment consortium. Actis and Comafin, which achieved a dollar return of in excess of 20 per cent, have been shareholders since 1999. Protea is an African hotel group with 130 hotels across Africa, the UK and Russia.
Peter Schmid, a managing partner of Actis, said: "Our investment in Protea has generated attractive returns and is an excellent demonstration of how we work with management to help them unlock value and build successful businesses by leveraging our African network. The tourism and hospitality sector remains attractive and we will consider further investments in this industry."
Gresham has announced that it has made a successful exit from ANSA, a UK claims management business that offers an integrated service to deal with insurers' drainage claims. The move comes 12 months after Gresham provided the equity backing for the management buy-out of the company. Gresham made a return of 3x its initial investment and an IRR of 200 per cent.
Gresham has realised its investment in ANSA through a sale to Mavinwood plc, an AIM listed support services business. The deal was handled by Andy Marsh and Ken Lawrence for Gresham.
Halder has announced that it has signed an agreement that could lead to the sale of its stake in FCS Control Systems B.V. to NYSE-listed Moog Inc. FCS Control Systems is a designer and manufacturer of high-fidelity electromechanical and electro hydraulic flight and vehicle simulation equipment, and structural test systems that are supplied to the aerospace and automotive markets.
BMG Direct, the world's largest direct-to-customer distributor of music, has now closed its previously announced acquisition of The Columbia House Company, a direct marketer of DVDs, from The Blackstone Group. BMG Direct has acquired 100 percent of The Columbia House Company. Terms of the transaction were not disclosed.
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