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Weekly Deals and Funds Roundup: 27 August 200827/08/2008. Source: AltAssets. 
 A selection of the latest deals and funds news from across the globe - essential reading for those who need to keep up-to-date with the industry's key developments.
DEALS
Technology Start-up Fund Saxony (TGFS), a €60m early stage fund in Germany, has provided a seed investment of an undisclosed size to Pharetis. The Leipzig-based start-up company runs student community portal uniturm.de. TGFS is managed by CFH, a Leipzig-based firm, and the venture capital subsidiaries of three local savings banks. Fund investors are the Federal State of Saxony, supported by EU funds (EFRE), the savings banks of Chemnitz, Dresden and Leipzig and also the LBBW.
Vector Capital, a US private equity firm specialising in spin-outs, buy-outs and recapitalisations of technology businesses, has made an unsolicited bid for Israel-based security software company, Aladdin Knowledge Systems. Vector Capital's proposal includes a potential alternative transaction of Vector Capital acquiring Aladdin's digital rights management business, potentially combined with a repurchase by Aladdin of the shares of Aladdin purchased by Vector Capital, and the sale by SafeNet, a Vector affiliate, of its authentication business to Aladdin. SafeNet is a direct competitor of Vector. Last year, Vector Capital raised Vector Capital IV, a $1.2bn investment fund.
BlackEagle Partners, a Michigan-based special situations private equity firm, has acquired InStar Services Group, a non-core division of The ServiceMaster Company, a portfolio company of private equity firm Clayton, Dubilier, & Rice. Based in Fort Worth, Texas, InStar is a provider of disaster response, insurance restoration and reconstruction services operating from 14 branches throughout the US. The InStar management team will own a significant stake in the business post-acquisition and Dave Demos will remain in his role as president and CEO. BlackEagle seeks businesses with an enterprise value below $200m.
American Capital has realised a gain of $57m from the sale of Contec Holdings to an affiliate of Bain Capital Partners. Including the investments in Contec of American Capital's affiliated funds under management, the gain totals $98m over the life of the investment. Cumulative gains and dividend income realised by American Capital and its affiliates totalled over $120m over the life of the investment. American Capital originally invested in Contec in June 2006. American Capital has approximately $20bn in capital under management and over 290 portfolio companies.
Upstream energy-focused private equity firm Intervale Capital has invested in the recapitalisation of Tejas Research & Engineering, a growing engineering and completions technology company based in The Woodlands, Texas. Tejas provides design, engineering and testing services to the completions segment of the oilfield services market. The investment is Intervale Capital's fourth investment from its recently-closed $280m debut buy-out fund, Intervale Capital Fund.
US private equity firms One Equity, Tinicum Capital and Sagard Capital have agreed to invest a total of $155m in X-Rite, a publicly-listed colour systems software company. One Equity will invest $100m while Tinicum and Sagard, who are existing shareholders of X-Rite, will invest $55m. The transaction is expected to reduce X-Rite's debt to $267m, from $411m. One Equity manages $8bn of investments and commitments for JPMorgan Chase & Co.
Nordic mid-market buy-out firm Segulah has completed the acquisition of industrial group Gunnebo Industrier for €250m. The firm made the offer through subsidiary Segulah Stellata Holding, which is wholly owned by the Segulah III and Segulah IV funds. Gunnebo has operations in 15 countries, employing some 1,530 people. The group develops, manufactures and markets industrial products such as chain and lifting components, fastening systems for the building industry, blocks and systems for heavy lifting, non-skid products and telescopic ladders. The company's annual revenue amounts to approximately €260m. Segulah is the exclusive investment advisor to the Segulah II (SEK850m), Segulah III (SEK2.35bn) and Segulah IV (SEK5bn) UK limited partnerships.
Private equity firm Lone Star Funds has acquired German lender IKB Deutsche Industriebank from German state development bank KfW Bankengruppe. Financial details were not disclosed. All of KfW's shares in IKB, which represent 90.8 per cent of the group, will be acquired by Lone Star. IKB, which specialises in lending to small and medium-sized businesses in Germany, was the first European casualty of the subprime crisis. Lone Star will provide IKB with additional equity, the firm said. Lone Star recently agreed to purchase $30.6bn of collateralised debt obligations from Merrill Lynch for $6.7m.
TVM Capital, Signet Healthcare Partners and Paul Capital Healthcare have agreed to invest €16m in a financing round by SpePharm Holding, a pan-European specialty pharmaceutical company. SpePharm's senior management will also participate in this financing round. At the same time, Paul Capital and SpePharm have agreed to invest another €10m to fund SpePharm's acquisition of Dantrium for Europe and other markets, from Procter & Gamble Pharmaceuticals. TVM Capital, which has €820m under management and Signet Healthcare are the founding investors in SpePharm.
Turn Inc, an online advertising specialist, has closed a $15m financing round led by Focus Ventures with Norwest Venture Partners, Trident Capital and Shasta Ventures participating. This brings Turn's total equity investment to date to approximately $37m. Turn will use the funds to scale its market development, create new products and expand its team in the sales and client services arena. Turn employs machine-learning technology to combine automatic targeting and goal-driven pricing for more than 500 advertisers and 3,000 publisher sites. Focus Ventures manages $830m.
Irish venture capital firm Delta Partners has invested €2.5m in technology company Luzern Solutions. Luzern, founded in 2002, works with retailers of consumer electronic goods. Its systems help retailers to sell the six per cent of products which are returned by consumers. Luzern uses sites such as eBay and its own website. As well as Ireland, Luzern has operations in the UK, Spain, Germany and Netherlands. Delta was established in 1994 and has made over 50 investments in early stage companies.
Emerging markets-focused private equity firm Aureos Capital has invested $4.75m for 25 per cent in Sunshine Holdings, a Sri Lankan group involved in plantations, branded teas, distribution of pharmaceutical and related products and metal packaging solutions for food and beverages. Sunshine posted revenues $68m and profits of $1.9m for the year ended March 2008. Sunshine will use the capital provided by Aureos to increase its investment in a telecommunications joint venture with the Tata Group and to expand its packaging business. Aureos is in the process of raising funds for the $100m Aureos Central Asia Fund, the $300m Aureos Latin America Fund and the $400m Aureos Africa Fund.
Aureos Capital's East Africa Fund has sold its stake in Uganda Microfinance Limited to Equity Bank, a Kenyan bank listed on the Nairobi Stock Exchange. The sale was completed jointly with all other shareholders in UML, including Norfund, the Norwegian investment fund for developing countries. The existing shareholders of UML received approximately eight million new shares of Equity Bank valuing the transaction at $25.5m. Aureos invested in UML in 2004. Aureos invests in small to mid-market businesses in emerging markets.
American Capital has realised a gain of $19m from the sale of PaR Systems to MML Capital Partners. American Capital's inception to date total realised gain on its investment in PaR Systems was $37m, representing a 42 per cent compounded annual rate of return, including interest, dividends and fees. Including investments in PaR Systems by American Capital affiliated funds under management, the gain totals $48m. PaR Systems is a provider of specialised material handling. American Capital has approximately $20bn in capital under management and over 290 portfolio companies.
Mid-market buy-out firmAdvent International has acquired 38 per cent in Amscan Holdings, a US-based manufacturer of party goods and accessories. Existing investors include Berkshire Partners, Weston Presidio and management. The value of the transaction was not disclosed. In 2007, Amscan generated a pro forma gross revenue of $1.7bn. Amscan operates a party-supply retail network with more than 950 stores, including franchise locations, across the US and Puerto Rico.
Helsinki, Finland-based Supponor, a provider of digital billboard solutions, has raised €6m in a Series A round. The funds will be used for international sales and marketing and to promote Supponor product DBRLive, a system for masking and replacement of event advertising content in live sports broadcasts. The funding was led by Northzone Ventures and Conor Venture Partners. Northzone is a European early stage venture capital firm, with offices in Stockholm, Oslo and Copenhagen while Conor is a Finnish early stage technology venture capital firm and an existing investor in Supponor.
Mall Networks, a provider of loyalty shopping solutions, has raised $7m in Series B round led by Dace Ventures. The funding also included existing investors Flybridge Capital Partners, Venture Capital Fund of New England and LBO Enterprises. Mall Networks will use the financing for product development, and expand sales, marketing and services capabilities. As part of the deal, Jon Chait, a partner at Dace Ventures, has joined Mall Networks' board. Massachusetts-based Dace Ventures is a venture capital firm with approximately $70m under management.
Huron Capital Partners has acquired direct marketing services company, Response Mail Express, from its former parent DME Holdings. Financial terms were not disclosed. This is the first investment of The Huron Fund III, which closed on $350m earlier this year. Florida-based RME services customers in the financial services, insurance and mortgage sectors. Huron Capital manages approximately $600m. Including this transaction, RME has invested in six companies this year. The firm's previous fund, The Huron Fund II, closed on $185m in 2005.
JumpTap, a mobile search and advertising company, has raised $26m in a Series D round led by AllianceBernstein. All existing investors also participated, including General Catalyst Partners, Summerhill Venture Partners, Redpoint Ventures, Valhalla Partners, and WPP. The funding will be used to develop JumpTap's mobile search and advertising solutions and to continue expansion of its global ad sales and operations divisions. AllianceBernstein is a publicly traded global asset management firm with approximately $694bn under management.
Miami-based Trivest Partners has acquired ATX Networks, a manufacturer of equipment for cable operators. Financial terms were not disclosed. Trivest and ATX's management team, led by CEO Ken Wildgoose, acquired the company from its non-active founder. Wildgoose and his team will continue to lead ATX's daily operations. The ATX transaction represents the second platform investment for Trivest Fund IV. Trivest has completed more than 145 transactions, totalling approximately $4bn in value.
New York-based GenNx360 Capital Partners has agreed to acquire Precision AeroPower Group, a provider of precision manufacturing and engineering services and a portfolio company of the GSC Group. Financial terms were not disclosed. Precision AeroPower, which is projected to generate $260m in revenues this year, provides original equipment manufacturers and tier-one suppliers with mission-critical components used in aircraft engines, aircraft structures and hardware, military vehicles and communications equipment, weapons systems, industrial gas turbines and wind power equipment. GenNx360 focuses on buy-outs of mid-market industrial companies. GSC Group specialises in credit-driven investing including corporate credit, equity and distressed investing and structured mortgage products. It has approximately $22bn under management.
Blackstreet Capital Partners has sold Houston Harvest and Gift Products to Swiss-based Signature Brands. Financial terms were not disclosed. Houston Harvest and Gift Products are based in Illinois, and are suppliers of seasonal food gifts and popcorn tins to mass retailers like Wal-Mart, Target and Kmart. Maryland-based Blackstreet Capital has approximately $88m under management. Signature Brands is a subsidiary of Hero, a seasonal product company.
Proteostasis Therapeutics has raised $45m in a Series A round from investors including HealthCare Ventures, Fidelity Biosciences, New Enterprise Associates, Novartis Option Fund and Genzyme Ventures. The funds raised will be used to develop drugs as novel therapies to treat multiple genetic and degenerative disorders associated with protein homeostasis deficiencies. As part of the deal, joining the board of Proteostasis Therapeutics are Stephen Knight, managing partner of Fidelity Biosciences, James Barrett, general partner at New Enterprise Associates, Lauren Silverman, managing director of Novartis Option Fund and Alan Walts, managing director of Genzyme Ventures.
Shanghai-based Profex has raised $15.5m in a Series A round from Trident Capital and Trident's partner in China, Mustang Ventures. Profex licenses, acquires, and markets dermatology medicines and aesthetic products in China. Trident has approximately $1.5bn under management.
Metalmark Capital Partners, Greenhill Capital Partners and members of the senior management of BreitBurn Energy have acquired 96 per cent in the oil and gas company. BreitBurn Energy is publicly-traded and focuses on the exploration and development of oil and natural gas reserves in the Antrim Shale in Michigan, the Los Angeles Basin in California, the Wind River and the Big Horn Basins in central Wyoming.
MIOX Corporation, a provider of water treatment systems, has raised $19m in a Series C round, led by California-based venture capital firm DCM. Other investors included existing investors Sierra Ventures and Flywheel Ventures. The funding will help MIOX access global markets while they continue to build on their track record of successful product innovation. DCM manages $1.6bn, while Sierra Ventures has $1.5bn under management.
Osum Oil Sands, a Canadian bitumen extraction company, has raised CAN$275m in private equity funding. Warburg Pincus led the transaction and was joined by The Blackstone Group. Alberta-based Osum focuses on the application of in situ recovery technologies to bitumen extraction. As part of the deal, Jeffrey Harris and David Krieger, both managing directors of Warburg Pincus, and David Foley, senior managing director of Blackstone, will join the board of Osum. Warburg Pincus has approximately $35bn of assets under management while Blackstone's total assets under management are approximately $119bn.
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