BlackRock to auction Amazon aggregator once valued at US$1 billion
Online sales growth slowed after the pandemic, leaving many aggregators saddled with debt they could not pay
BLACKROCK has initiated an auction for German startup SellerX, taking the unusually aggressive step after a loan granted to the Amazon aggregator soured.
An advertisement published on Aug 23 in the Börsen-Zeitung newspaper stated that the auction for the L Catterton-backed firm has been scheduled for Sep 17 at a Berlin hotel. In Germany, such auctions can be used by creditors to seize control of companies after negotiations between an enterprise, investors and lenders have hit an impasse, often wiping out equity held by investors.
The move is evidence of an accelerating shakeout among companies known as aggregators that raised billions and snapped up brands sold on Amazon.com, only to find themselves struggling when the pandemic-era e-commerce boom ran out of gas.
Friday’s ad notes that GLAS, a debt administration services provider, is carrying out the auction. GLAS is named in corporate filings as the security agent of SellerX’s loan facility, which was granted by BlackRock and Victory Park Capital.
BlackRock and Victory Park Capital declined to comment. L Catterton and SellerX did not respond to requests for comment.
BlackRock and Victory Park Capital extended a US$400 million loan to SellerX in 2021, which was increased last year when SellerX acquired fellow aggregator Elevate Brands. BlackRock has since moved the loan to non-accrual status – which means borrowers have stopped making payments. In an earnings call earlier this month, BlackRock said it was in discussions with SellerX stakeholders to find a “path to recovery.”
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SellerX, once valued at US$1 billion, was among dozens of startups with audacious plans to become Digital Age consumer conglomerates. Instead, online sales growth slowed after the pandemic, leaving many aggregators saddled with debt they could not pay. That in turn forced a consolidation, pitting the who’s who of the investment world against one another.
L Catterton, the private equity arm of the world’s second wealthiest man, Bernard Arnault, made equity investments in several aggregators. BlackRock and Victory Park Capital provided loans to multiple firms. So the three companies are often negotiating turnaround strategies for distressed aggregators.
Victory Park Capital, which in 2021 received a commitment for as much as US$500 million in senior secured credit facilities from Apollo Global Management, is being acquired by Janus Henderson Group. The deal, announced earlier this month, is expected to close later this year.
Founded in 2020, SellerX raised more than US$750 million in debt and equity. Its founders, who served as co-chief executives, have announced plans to leave the company, news reported earlier by Sifted, which covers European startups. BLOOMBERG
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