Versa Capital Management announced that one of its affiliates was declared the winning bidder in the auction for the business of The Wet Seal.
Versa’s winning bid includes replacement DIP financing, which will be presented for Court approval at a hearing scheduled on March 18, 2015, in the U.S. Bankruptcy Court for the District of Delaware. Pursuant to Versa’s bid, Wet Seal is completing the sale under Section 363 of the Bankruptcy Code. To this end, Wet Seal and an affiliate of Versa have entered into an asset purchase agreement which the parties intend to submit to the court. Under the purchase agreement, the buyer is to acquire substantially all of the assets of Wet Seal, subject to court approval and other conditions.
Versa Capital is pleased to have prevailed in our effort to acquire Wet Seal’s business,” said Greg Segall, chairman and CEO of Versa. “We have been assessing the dramatically shifting landscape in Wet Seal’s category for more than a year and determined that Wet Seal, among the many companies we evaluated, was best positioned in the marketplace, and thus we pursued this deal with determination. We now look forward to working with CEO Ed Thomas and the rest of the dedicated Wet Seal team to conclude the transaction and pursue the many opportunities for growth and profitability now available under Versa’s ownership.”
“We believe our agreement with Versa provides the best possible outcome for our creditors, employees, customers and other constituents,” said Ed Thomas, CEO of Wet Seal. “We are focused on executing an orderly emergence from bankruptcy court supervision and collaborating with Versa to improve the operational and financial performance of the business.”
Versa is being advised by Greenberg Traurig, Klehr Harrison Harvey Branzburg and KPMG. Wet Seal is being advised by Klee, Tuchin, Bogdanoff & Stern, Paul Hastings and Houlihan Lokey Capital.
The Wet Seal sells apparel, footwear and accessories designed for teen girls and young women of all sizes through retail stores nationwide, as well as an e-commerce website. As of January 15, 2015, the company operated a total of 173 stores in 42 states and Puerto Rico and an e-commerce business at www.wetseal.com.