Venture Capital News
$160,000 Loan Inaugurates Angel Network-Matched Biotechnology Center Program
North Carolina's smallest, most high-tech biotechnology "plumbing company" is the first recipient of an innovative new loan from the North Carolina Biotechnology Center.
Advanced Liquid Logic, a microfluidics "lab-on-a-chip" spinout from Duke University's Pratt School of Engineering, is the first company in the state to get a Biotechnology Center Strategic Growth Loan (SGL). The $160,000 boost is the latest of several loans from the Biotechnology Center to the Research Triangle Park-based firm.
The Biotechnology Center launched the SGL concept earlier this year to help promising new biotechnology companies anywhere in the state survive the difficult startup process. An SGL may provide as much as $250,000, but the loan must be matched by an equal "angel network" or venture capital loan or investment. The SGL addresses a sometimes-deadly cash gap faced by many start- up companies between early-stage seed funding and later investment from venture capitalists, business partners and shareholders.
Richard West, a Duke engineering graduate, joined Advanced Liquid Logic technical co-founders Michael Pollack and Vamsee Pamula in early 2005. He understands well the trials and triumphs of entrepreneurship. Before heading Advanced Liquid Logic he was founder and CEO of TriVirix, originally a tiny Chapel Hill-based venture-funded medical equipment contract manufacturer that West shepherded through growth into an employer of some 500 people. New owners have since taken the firm to Minnesota.
Kenneth Roozen, executive administrator of the South Carolina-based Charleston Angel Partners, said the Biotechnology Center's due-diligence process and resultant funding, though separate from that undertaken by angel networks, provides a significant boost to an applicant's appeal. It contributed to his group's decision to invest in Advanced Liquid Logic, he said.
The Biotechnology Center has been providing a variety of loan programs to new biotechnology ventures for more than 17 years, primarily targeting start- up company research. But the SGL isn't restricted to research funding, said John Richert, Vice President of the Biotechnology Center's Business & Technology Development Program.
Advanced Liquid Logic's core technology involves electronic wizardry for moving and analyzing miniscule droplets of liquid -- droplets measured in microliters and even nanoliters. That's a millionth and a billionth of a liter, respectively. To put that into perspective, West said a typical raindrop contains about 50 microliters of water.
Though the field of microfluidics research is growing, West said his firm is approaching it in a unique way. Most efforts in the field have been in channel-based technology using pumps, valves and pipes made on a micro scale, he said.
Put a bunch of electrodes in an array of a specific design, and you can, by sequentially turning them on and off, move droplets of blood or other fluid around the surface. The concept holds huge promise in both diagnostic and research instrument applications.
The firm has amassed more than $5 million in loans and grants since its founding in 2004 by Pollack and Pamula -- mostly in grants from the National Institutes of Health. It's one of two early-stage North Carolina biotechnology companies that received $15,000 Business Development Loans from the Biotechnology Center last year.
The firm is also among 16 North Carolina organizations awarded a total of $696,000 in state innovation grants as part of the new One North Carolina Small Business Fund, approved by the General Assembly last year with $1 million for the first round of grants for small businesses involved with research and technology development. Successful applicants had to already have a federal Small Business Innovation Research or a Small Business Technology Transfer award. Advanced Liquid Logic received $34,782 for a NASA-sponsored project to develop its lab-on-a-chip to perform diagnostic tests.
The Biotechnology Center, headquartered in Research Triangle Park, is a private, non-profit corporation supported by the N.C. General Assembly. Its mission is to provide long-term economic and societal benefits to North Carolina by supporting biotechnology research, business and education statewide.
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Pathway Medical Closes $25 Million in Funding
Representatives of Pathway Medical Technologies, Inc., an innovator of endovascular treatments for peripheral arterial disease (PAD), announced that the company has closed a $25 million Series B round of financing. Two new investors joined the financing round: lead investor HLM Venture Partners and Latterell Venture Partners. In addition, existing investors ABN AMRO Capital Lifesciences, Giza Ventures and Oxford Bioscience also participated.
PAD is a serious disease affecting an estimated 14 million people in the U.S. PAD results when atherosclerotic obstructions cause narrowed or blocked arteries that reduce blood flow to the arms or legs. These blood flow restrictions can cause severe pain while performing relatively simple tasks. Over time, avoiding treatment could result in more severe complications, such as skin discoloration, infections and sores that will not heal and, in extreme cases, eventual amputation.
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Brockway Moran & Partners Acquires MW Industries
Representatives of Brockway Moran & Partners, Inc., a Florida-based private equity firm, announced that it has, in partnership with management, acquired MW Industries, Inc., a leading manufacturer and catalog marketer of custom engineered mechanical components. CITIC Capital Partners is a co-investor in the transaction alongside Brockway Moran & Partners and management.
Headquartered in Logansport, Indiana, MW Industries specializes in the manufacture of highly engineered springs, specialty fasteners and precision stampings used in a wide array of applications across a diverse set of end markets. The company services a broad industrial customer base of blue chip companies through both its direct sales efforts and catalog operations.
MW Industries employs more than 900 people through 13 operating divisions located in nine states across the United States, which facilitates best-in-class customer service and speed to market.
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American Securities Closes Sale of Primary Energy Ventures
Representatives of American Securities Capital Partners, LLC announced Wednesday it has closed the sale of Primary Energy Ventures LLC, a leading owner and operator of on-site combined heat and power and recycled energy projects, to EPCOR Power L.P., for an acquisition price of approximately $380 million, including the assumption of lease obligations.
Primary Energy wholly owns eight facilities in the United States with an aggregate generation capacity of approximately 454 megawatts and 3.1 million lbs./hr of thermal energy, and owns a 15.4% equity interest in Primary Energy Recycling Holdings LLC (PERH). PERH wholly owns four energy facilities in the United States with an aggregate generation capacity of 284 megawatts and 1.9 million lbs./hr of thermal energy, and a 50% interest in a pulverized coal facility. The remaining 84.6% interest in PERH is held by Primary Energy Recycling Corporation (PERC), which trades on the Toronto Stock Exchange.
Primary Energy serves as Manager of PERC under a long-term Management Agreement. The combined value of Primary Energy and PERC is approximately $820 million.
American Securities first partnered with the Primary Energy management team in 2003 to acquire six operating subsidiaries from NiSource Inc., an Indiana public utility holding company. Since that time, American Securities has worked closely with Primary Energy to make additional acquisitions with a focus on recycled energy projects contracted to investment grade counterparties.
Recycled energy, which creates value from waste heat, provides both efficient and environmentally friendly energy. Primary Energy's management team and power generation facilities are among the leading energy recyclers in the United States.
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IBM And Lehman Brothers to Invest in Chinese Businesses
IBM and Lehman Brothers representatives announced they are teaming up to create the China Investment Fund with an initial capitalization of $180 million to drive the financial and business transformation of Chinese enterprises through innovative business practices and technology.
With each company initially providing $90 million, the fund brings together the strengths of both companies -- Lehman Brothers' global investment banking and private equity experience and capabilities, and IBM's business and operational insight as well as its technology leadership in China. Creation of the fund marks the first such alliance between IBM and Lehman Brothers anywhere in the world.
The fund's investments will support the China central government's policy that encourages companies to be innovative in business practices and management as well as in information technology and product development.
Unlike traditional venture capital firms that give early-stage companies money in exchange for an ownership stake, IBM and Lehman will focus on mid-stage to mature, public or private Chinese companies across many industry sectors. In addition to funding, IBM and Lehman will provide management and technology expertise to the companies in which they invest, enabling those companies to keep pace with the quickly evolving Chinese market.
China's GDP was ranked fourth in the world in 2005, and with an economy expected to grow 7.5 percent per year over the next five years, the country is expected to rank third, behind only the U.S. and Japan, by 2010.
China's 11th 5-Year Blue Print (2006-2010), which encourages a company rather than government-driven innovation system, focuses on optimizing and upgrading traditional industries while developing high-tech industries such as information technology, communications, next generation networks, nanotechnology, biotechnology and an IT services sector.
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Novak Biddle Raises Fifth Fund, Promotes Four to General Partner, Adds Investment Professional
Representatives of Novak Biddle Venture Partners, the Greater Washington, DC metro region's premier early stage IT venture fund, announced Monday the first and final closing of its fifth partnership(NBVP V), raising $227 million. The fund will continue the firm's investment strategy of nurturing young technology companies and innovations spun out of government labs and universities. NBVP also today announced the promotions of three investment professionals and its CFO to general partner: Philip Bronner, Andrea Kaufman, Tom Scholl and CFO Joy Binford.
Janet Yang has also joined the firm as principal, bringing to NBVP significant international and operational experience. Ms. Yang previously worked with a China-based information technology company and San Francisco venture capital firm Draper Richards.
The fund's return investors include Common Fund, FLAG Venture Partners, Verizon, ATP Private Equity Partners, Howard Hughes Medical Institute, Indiana University, Northern Trust, Notre Dame, Park Street, Silicon Valley Bank, the State Retirement Plans of Virginia and North Carolina, University of California, University of Richmond, and Virginia Tech. New NBVP limited partners include Carnegie Mellon University, the Church Pension Fund, Georgetown University, the Hillman Family, Kenyon College, Little Hawk Venture Opportunity Fund, Lumina Foundation, Pantheon Ventures, Princeton University, Purdue University, University of Minnesota, and the University of Virginia.
Novak Biddle Venture Partners is the most active Washington, DC metro-based fund investing in early stage companies including those in the education, homeland security, and software sectors. The firm has been expanding its geographic reach, investing in various regions including Raleigh, Seattle, New York, Pennsylvania, and Israel.
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Advent Adds Six Buyout Professionals to North American Deal Team
Representatives of Advent International, the global private equity group, announced Tuesday the addition of six new members to its Boston- based North American deal team. Jeff Case and John Maldonado join as Principals, and David Chen, Bryan Doherty, Kevin McQuarrie and Thomas Weisman as Associates.
All six appointments support the ongoing activity of Advent's $3.3 billion GPE buyout program, which invests primarily in North America and Western Europe. 2005 was a record year group-wide for Advent, which raised three new buyout funds totaling $4 billion, completed over 30 full and partial exits and received numerous industry awards including Financial Sponsor of the Year from the European Venture Capital Journal and Mid-Market Buyout of the Year from the EVCA.
Recent transactions in North America include the successful sale of a majority stake in Boart Longyear, the world's leading provider of drilling services and products, to a consortium led by Macquarie Bank Limited; the buyout of BondDesk Group, the leading alternative trading system for odd-lot fixed-income; and the purchase of lululemon athletica, a premier athletic and yoga apparel retailer.
Additionally, GFI Group, one of the world's leading inter-dealer brokers of OTC derivatives, completed a secondary public offering in May 2006, following its successful flotation in 2005 - one of the Top 10 performing IPOs of last year.
Jeff Case rejoins Advent following the completion of his Harvard MBA. Before originally joining Advent in 2001, Case worked as an analyst at Bowles Hollowell Conner/First Union Securities. He also worked for Danaher Corporation's corporate development group. Going forward, he will focus on buyout opportunities in the retail and consumer sectors. John Maldonado joins Advent from Parthenon Capital. Prior to that he was with Bain Capital, where he worked on large buyouts across several industries. At Advent, Maldonado will focus on the business/financial services and healthcare services sectors.
Joining the Advent Associate Program, is David Chen who comes to Advent from Merrill Lynch's financial institutions group, while Bryan Doherty joins from William Blair's financial sponsors group, Kevin McQuarrie, from Lazard Frere & Co.'s life sciences group, and Thomas Weisman, from UBS Investment Bank's financial sponsors leveraged finance group. Each Associate will work for one of Advent's four sector teams focused on business and financial services, retail and consumer, industrial and healthcare.
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Aurora Biofuels Team Wins Intel, Berkeley Tech Challenge
Aurora Biofuels, a Berkeley-based team whose technology promises to make bio-diesel a mainstream energy source, won the second global Intel+UC Berkeley Technology Entrepreneurship Challenge on Thursday, October 26 at the UC Berkeley campus.
The global business plan competition invited entrepreneurial teams from 19 Arab, Chinese, Indian, Mexican, Russian, Singaporean, and US universities. The competition sponsored by Intel and hosted by the Lester Center for Entrepreneurship & Innovation at UC Berkeley is designed to promote the unique combination of technical innovation and entrepreneurial skills at higher education institutions around the globe. The Challenge brings together the best research institutions around the world in partnership with regional business plan competitions to find teams and technologies with the potential for positive global impact.
Aurora Biofuels won the Intel Foundation's grand prize of $25,000 for presenting technology which confronts consumer demand for green energy. Biodiesel is gaining acceptance as a practical alternative to petroleum-based fuels, as it can be distributed via existing infrastructure and can be used in unmodified diesel engines.
Intel Foundation with UC Berkeley awarded a second place prize of $10,000 to Richcore Lifesciences, from Bangalore, India. The company has developed a proprietary technology which imparts hygroscopic properties to ordinary paper, enabling it to absorb moisture from the atmosphere and remain moist perpetually.
Chilight from Peking University, China and Watel Solutions from Arizona State University were awarded the third place prize of $5,000. Chilight developed a next-generation lighting source in the form of energy saving LED chips while Watel Solutions created a unit that produces potable water by condensing humidity from the air.
The Humanitarian Prize went to Gravitonus, a medical device company that developed an Alternative Computer Control System (ACCS) that helps paralyzed individuals resume active lives.
The People's Choice Prize of $5,000, decided by audience members at the forum's concluding ceremonies, was awarded to Watel Solutions, with their innovative idea to provide fresh drinking water to those in rural areas with few resources.
The 19 finalist teams in the challenge were selected as the best technology-based ventures that emerged from 10 affiliated business plan competitions around the world: the UC Berkeley Business Plan Competition; the Business Innovation Technology competition, a collaboration of six Russian universities; Tec de Monterrey's Premio Intel competition in Mexico; National University of Singapore's Start-Up@Singapore Enterprise Launcher; India Learning Links Foundation; China College Technology Entrepreneurship Competition; Brazil 1st GV-Intel Challenge of Entrepreneurship; NOVATECH Com (covering Poland, Czech Republic, Hungary, Romania, Bulgaria, Turkey), Pan Arab University Technology Biz Plan Competition and Arizona State University's Technology Entrepreneurship Challenge.
The finalist teams presented their technologies and business plans to a panel of judges drawn from venture capital firms with global reach – Intel Capital, Partech International, Newbury Ventures, Capital Valley Ventures and Alloy Ventures. In addition to cash prizes and experience in a global competition, this access to potential funders is a major reward for participating teams.
The winning team, Aurora Biofuels, consisted of CEO Matt Caspari, Vice President of Engineering and a recent Haas School graduate, Guido Radaelli; Vice President of Research and Development Bert Vick, also a Ph.D. student in molecular and cell biology; and CFO/COO David Hansmann.
