peHUB Wire: Thursday, March 19, 2009

A few years back, I created a Word document called “The VC Walking Dead.” These were venture capital firms that were officially in business — lights on, working websites, cash to support existing investments — but which no longer had enough cash to add new portfolio companies.

Then I made the mistake of mentioning this document to peHUB Wire readers, who began regularly asking me to publish it. This posed some big journalistic dilemmas, because the list was mostly based on hearsay and intuition. Great for my desktop — bad for the Web.

Last week, however, I began the process of verifying the zombie-hood of the aforementioned firms. What I came up with was a baker’s dozen that could legitimately be dumped into the Walking Dead bucket. That only represents around one-third of the firms on my personal list, but it’s better to be safe than sorry when it comes to things like this. If you’ve got an additional firm to nominate — and can provide some specific details — my inbox is always open and confidential. And yes, I do expect this to be just Part I of an ongoing series.

So, without further ado, get it all right here.

*** Self-Promotion Alert: I’ll be on CNBC this morning at 10:10am ET to discuss Goldman Sachs’ attempt to put a bunch of its private equity capital into distressed debt. Yes, this is why the Wire is so early this morning…

Top Three

Platinum Equity has agreed to acquire the San Diego Union-Tribune newspaper from The Copley Press, in an all-equity deal reported to be worth less than $50 million.

ABRY Partners is in talks to acquire Grande Communications Inc., a San Marcos, Texas-based telecom provider, according to VentureWire. The report does not include a likely acquisition price, except to say that ABRY is trying to secure more than $125 million in debt financing through SunTrust Bank. Grande has raised over $340 million in VC funding since 2000, from firms like BancBoston Capital, Kinetic Ventures, Atlas Venture, Whitney & Co., Centennial Ventures, HarbourVest Partners, South Atlantic Venture Funds, PNC Equity, TD Capital, Trinity Ventures, Lightspeed Venture Partners, Austin Ventures, CIBC, GE Equity, Alta Communications, Convergent Investors, Opus Capital, Norwest Equity Partners and Prime New Ventures.

August Capital, a Palo Alto, Calif.-based VC and growth equity firm, has closed its fifth fund with $650 million in capital commitments.

VC Deals

Buzznet, a Los Angeles-based community of pop culture websites, has raised $12 million in third-round funding. Focus Ventures led the round, and was joined by return backers Anthem Ventures, N! ew Enterprise Associates, Redpoint Ventures and Sutter Hill Ventures. In related news, the company has changed its name to Buzz Media Inc., a Sunnyvale, Calif.-based P2P lending network, has raised $12 million in Series B funding. Morgenthaler Ventures led the round, and was joined by return backers Norwest Venture Partners and Canaan Partners. The company had previously raised over $10 million.

Edgeware, a Stockholm, Sweden-based provider of flash memory-based servers for network-deployed delivery of TV and video services, has raised $8 million in Series B funding. Micron Technology led the round, and was joined by return backers Amadeus Capital Partners and Creandum Advisor. The company also opened a Silicon Valley office.

CallMiner Inc., a Fort Myers, Fla.-based provider of enterprise speech analytics, has raised an undisclosed amount of Series C funding. Backers include Sigma Partners, Intersouth Partners, Inflexion Partners and a new undisclosed strategic partner. The company had previously raised around $15 million.

AdventureLink Inc., an online source for booking adventure travel, has acquired Denver-based rival Adventure Central. As part of the deal, Adventure Central backer Allegis Capital has invested an undisclosed amount into Adventure Central.

Buyout Deals

Atlanta Equity Fund has sponsored a recapitalization of Empower Software Solutions, an Orlando, Fla.-based provider of HR management software. No financial terms were disclosed, except that Chatham Capital provided a $31 million junior secured facility.

Drug Fair, a New Jersey pharmacy chain bought by Sun Capital Partners in late 2005, has filed for Chapter 11 bankruptcy protection. It already has an agreement in place to sell some of its assets to Walgreen Co.

Foamex International Inc., a Media, Penn.-based maker of polyurethane foam for bedding and cushions, has received bankruptcy court approval for a DIP loan of up to $95 million, from MatlinPatterson and Bank of America.

Goldman Sachs plans to make a take-private bid for USJ Co. Ltd. (T: 2142), operator of Japan’s Universal Studios theme park. The deal could be worth more than $610 million.

HgCapital has acquired stakes in three Spanish solar photovoltaic plants, from AIG Financial Products Corp. and Spanish investment bank 360 Corporate. No consideration represented an enterprise value of €300 million.

Station Casinos Inc. said in a court filing that that it plans to file for bankruptcy on or before April 15, and that it is working on a pre-packaged plan of reorganization. The company was acquired for around $5.4 billion in 2007 by Colony Capital.

PE Exits

Celerity Partners has sold Ortho Organizers to Henry Schein Inc. (Nasdaq: HSIC) for an undisclosed amount. Ortho Organizers is a Carlsbad, Calif.-based manufacturer and distributor of orthodontics products.

Firms & Funds

ATP, a Danish labor pension system, has committed $400 million to a fund being raised by Hudson Clean Energy Partners.

West Hill Partners, a Boston-based buyout firm founded by ex-JW Childs pros, has ended efforts to raise its $500 million-targeted first fund.

Human Resources

Gili Raanan, founder of such companies a nLayers Inc. and Sanctum Inc., has joined Sequoia Capital as an Israel-based general partner.

Ross Catlin and Thad Johnson have joined NewStar Financial as senior bankers focused on middle-market origination. Catlin will work out of Darien, Conn., and previously was a managing director of FirstLight Financial’s middle-market sponsor finance group. Johnson will work out of Chicago, and previously was a managing director with Merrill Lynch Capital’s syndications and capital markets team.