Administrators have revealed why L Catterton was chosen as the preferred bidder for Seafolly.
KordaMentha's Scott Langdon said the private equity firm’s offer provided the best return to all creditors including its suppliers.
"I was overwhelmed by the level of interest and competition to own one of Australia’s most recognisable brands."
L Catterton, a private equity division of LVMH, is the parent company of Seafolly.
The preferred bid is through a Deed of Company Arrangement (DOCA). Details of the proposed DOCA will be sent to creditors.
Creditors will be asked to vote on the DOCA at the next meeting which is being held next Monday (3 August 2020).
One of the features of the DOCA is that L Catterton (or its related parties) will not share any of the return to creditors, even though it is Seafolly’s largest creditor.
This increases the return to other creditors, administrators said.
L Catterton acquired the business founded by the Halas family in Bondi Beach in 1975 through a series of transactions between 2014 and 2018.
More than 80 investors, private equity firms and other companies were interested in buying the business and 15 formal expressions of interest were lodged.