Boston-based Karmaloop, Inc., a 15-year-old online retailer specializing in streetwear, action sports and music-inspired clothing,announced that Comvest Partners and CapX Partners, are acquiring all of Karmaloop's businesses, including Karmaloop.com, PLNDR, Kazbah and Karmaloop Europe and investing significant growth capital into the business. Comvest and CapX will acquire the Company as part of the Company's voluntary chapter 11 bankruptcy case pending in the United States Bankruptcy Court for the District of Delaware.

Comvest and CapX served as the stalking horse bidder at the inception of the bankruptcy sale process, which ultimately proved to be the prevailing bid. Comvest and CapX also previously provided debtor-in-possession ("DIP") financing to the Company to support the Company's bankruptcy case and sale process. Comvest and CapX's winning bid was approved today by the U.S. Bankruptcy Court for the District of Delaware paving the way toward a closing of the sale in early June. Under the terms of the Asset and Purchase Agreement, Comvest and CapX will acquire substantially all of Karmaloop's assets and assume certain trade and other obligations.

Comvest Partner, Robert O'Sullivan, said, "We're excited to enter into this new chapter of the Karmaloop story. We've been involved with the Company since 2012 and are big believers in the brand's power and potential. As such, we're delighted that the process now allows us to deepen our relationship with the brand. We've already invested nearly $3 million in DIP financing during the bankruptcy process, and are investing millions more as part of the acquisition. With ample capital for growth and a debt-free balance sheet, Karmaloop is going to have a fantastic future. The loyal, dedicated Karmaloop customer base will see, over the coming months, new initiatives dedicated to forging a strategic growth path while retaining and building on the essence of the Karmaloop brand."

Karmaloop founder/CEO Greg Selkoe will transition his role to a new CEO, who will be announced next week. Selkoe will remain with the Company in an advisory role.

According to O'Sullivan, "Stay tuned for additional Karmaloop news soon. We anticipate sharing leadership news next week, and we will also begin rolling out exciting new initiatives that will respond to and support our customers' and business partners' evolving needs. We want to sincerely thank all of the employees, vendors and customers who have worked incredibly hard to maintain the business under difficult circumstances and have helped us understand what a truly unique asset it is. We look forward to working with all of them to restore the business to its former glory and beyond."

The restructuring and new funding will eliminate existing debt that was incurred to support the launch of four new business divisions and the development of television content between 2011 and 2013. Over time, these ventures proved to be economically unviable and the debt that remained as a vestige of these past efforts hindered working capital for the core business. The main property, Karmaloop.com, has continued to thrive with close to four million unique visitors each month. 

Comvest Partners is a private investment firm providing equity and debt capital to middle-market companies across the U.S. With over $2.1 billion of assets under management, the firm includes seasoned, senior level operating executives who partner with management and entrepreneurs to grow businesses and create long-term value. Since 2000, Comvest has invested more than $1.6 billion of capital in over 135 public and private companies.

Founded in 1999, CapX Partners is a specialty finance company that focuses on private equity and venture backed portfolio companies looking for debt financing in the $2 million to  $20 million range. CapX provides senior and mezzanine debt including lease lines and favors manufacturing, distribution, technology, energy and healthcare industries with an emphasis on revenue producing fixed assets.