Week in Review: Google Goes Social and Shire Completes ABH Acquisition

Posted by | July 1, 2011

What a week it’s been for Safeguard Scientifics and our partner companies. But before we get into those details, let’s recap some of the big news in social media this week.

MySpace was sold to Specific Media for $35 million, a fraction of the price News Corp. paid for the site in 2005. And in a display of perfect timing, Google announced its new social networking service, Google+.  Early adopters of the new platform have reported a striking similarity to Facebook, in both usage and appearance.  Google has tried entering the social enterprise before with Wave and Buzz, both of which showed promise but lacked the depth of current social networks.  It’s too early to tell what’s in store for Google+, but with Facebook being valued around $70 billion, the social enterprise is becoming a smash hit with investors.

Now on the Safeguard front… to start things off, one of our technology partner companies, Portico Systems, whose innovative solutions enable health plans to reduce administrative, medical and IT costs, announced on June 22nd that it signed a definitive agreement to be acquired by McKesson for $90 million, in cash, which will represent a 4x cash-on-cash return for Safeguard.

Speaking of acquisitions, on Wednesday, June 28, we realized aggregate cash proceeds of $145.4 million from the completed sale of life sciences partner company Advanced BioHealing to Shire. $7.3 million of those cash proceeds will be held in escrow until March 31, 2012.  Our total expected proceeds will represent a 13.5x cash-on-cash return for Safeguard.

Also this week, we led a $35 million series D round of financing for the Baltimore, MD-based NovaSom, a diagnostics company enabling home diagnosis and treatment of obstructive sleep apnea (OSA).  We provided $20 million of financing while the other $15 million was provided by existing investors, including TPG Biotechnology II Fund and Quaker BioVentures.  Financing will be used to fund the company’s growth, expand its leadership position in payer and provider markets, and develop additional innovations within the company’s proprietary NovaSom diagnostic medical device and cloud-based MediTrack Patient Management Portals.

Lastly, we added a new team member to our Technology Group — Philip Moyer — as Managing Director. A former member of Safeguard’s Technology Advisory Board, Phil will be responsible for deploying capital in and partnering with technology companies in the financial technology, and Enterprise 3.0 industries. Phil brings more than 25 years of experience to Safeguard, having most recently served as the President and CEO at EDGAR Online (Nasdaq: EDGR). While there, he led the transformation and recapitalization of the company, reversing losses and producing quarterly operating profits.

There’s also been a lot of news from our partner companies. Here’s a quick recap:

  • ThingWorx acquired Palantiri Systems, a visionary provider of the AlwaysOn software platform that enables intelligent machines to participate in a connected, collaborative world.  The AlwaysOn platform will extend the key functionality of Web 2.0, social media and the semantic web to the “world of things,” representing a catalyst for the next stage of the “connected devices” revolution.
  • Bridgevine was recently featured in the Google Mobile Ads Blog for expanding their business into mobile platforms, allowing their customers to perform research on their desktops and then finalize their purchase on a mobile device.
  • Beyond.com announced this week that its Career Network exceeds 25 million members – what a milestone! The Career Network allows professionals to showcase their talents, find the best job opportunities and efficiently manage their career with a personalized online Career Portfolio.
  • NuPathe announced that it will be presenting safety data gathered from a 12 month study of at the Zelrix patch the 15th Congress of the International Headache Society (IHS) in Berlin.  NuPathe’s New Drug Application (NDA) is currently under review by the U.S. Food and Drug Administration, with a target complete date set at August 29, 2011.

And if you haven’t gotten a chance to read about last month’s Network for Teaching Entrepreneurship (NFTE) Philadelphia business plan competition, Flying Kite featured a profile on the first and second place winners. You can read about it here.

To read more in our “Week in Review” series, please follow the following feed: www.safeguard.com/weekinreview. Have a great weekend!

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