Versa Capital Management, LLC Prevails in Acquiring Wet Seal’s Business
By Business Wire News
By Business Wire News
PHILADELPHIA & FOOTHILL RANCH, Calif.
Versa Capital Management, LLC (“Versa”) announced today that one of its affiliates was declared the winning bidder in the auction for the business of The Wet Seal, Inc. (“Wet Seal”) (OTCMKTS: WTSLQ), a specialty retailer in reorganization proceedings.
Versa’s winning bid includes replacement debtor-in-possession financing, which will be presented for Court approval at a hearing scheduled on March 18, 2015, in the United States Bankruptcy Court for the District of Delaware (the “Court”). 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. More information about the auction and relevant motions can be accessed at www.donlinrecano.com/wetseal.
“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 LLP, Klehr Harrison Harvey Branzburg LLP, and KPMG LLP. Wet Seal is being advised by Klee, Tuchin, Bogdanoff & Stern LLP, Paul Hastings LLP, and Houlihan Lokey Capital, Inc.
About Versa Capital Management
Based in Philadelphia, Versa Capital Management is a private equity investment firm with more than $1.4 billion of assets under management focused on control investments in special situations involving middle market companies where value and performance growth can be achieved through enhanced operational and financial management. Versa’s portfolio includes retailers Avenue Stores and Vestis (Bob’s Stores, Eastern Mountain Sports and Sport Chalet); restaurants such as Black Angus Steakhouses; community newspapers under Civitas Media; and manufacturers that service a variety of industries. More information can be found at www.versa.com.
About The Wet Seal, Inc.
The Wet Seal, Inc., a pioneer in fast fashion retailing, 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. For more company information, visit www.wetsealinc.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the party making such statement. All statements contained in this press release that are not statements of historical fact and all estimates, projections, future trends and the outcome of events that have not yet occurred referenced in this press release should be considered forward-looking statements. All forward-looking statements made in this press release are predictions and not guarantees of future performance, involve material risks and uncertainties and are subject to change based on factors that are difficult to predict and that may be beyond the control of the parties. Such factors include, but are not limited to, (i) the closing of the contemplated sale of assets pursuant to Section 363 of the Bankruptcy Code is subject to various conditions, (ii) Wet Seal’s ability to obtain Bankruptcy Court approval with respect to motions in its chapter 11 cases, (iii) Bankruptcy Court rulings in Wet Seal’s chapter 11 cases and the outcome of the cases in general, including risks associated with third party motions, (iv) challenges and risks associated with Wet Seal continuing to operate and manage its business under Chapter 11 protection, and (v) other risks, uncertainties and factors described in Wet Seal’s filings with the Securities and Exchange Commission. Wet Seal will not undertake to publicly update or revise any forward-looking statements even if experiences or future changes make it clear that any projected results expressed or implied therein will not be realized. Furthermore, based on the terms of the contemplated asset sale pursuant to Section 363 of the Bankruptcy Code, Wet Seal cautions that it does not expect to distribute any proceeds from the sale to its stockholders and, as a result, believes that its shares of common stock are worthless.
Abernathy MacGregor (for Versa)
Rivian Bell, 213-630-6550
Chuck Dohrenwend, 212-371-5999
Tom Hillebrandt, 949-699-3967
Interim Chief Financial Officer