Private equity to buy InPhonic for $50M through bankruptcy: Versa Capital Management will also provide additional $25M in financing

Shares of InPhonic Inc. continued their free-fall as the online wireless retailer filed for Chapter 11 protection and said it will sell “substantially all” of its assets to Versa Capital Management, a Philadelphia-based private-equity firm.
InPhonic operates white-label customer service sites as well as the online storefront Wirefly. Versa has bid $50 million to acquire the company, an InPhonic spokesman said, and separately agreed to provide $25 million debtor-in-possession financing to fund bankruptcy procedures.
The sale is subject to better offers and the company will continue to do business as the case wends though bankruptcy court.
“We intend to use this filing to take the actions necessary to position InPhonic for future success,” said CEO Andy Zeinfeld. “InPhonic plays a critical role as a leader in the wireless marketplace and through this sale to Versa, it will operate on stable financial footing and its leading role will be preserved.”
InPhonic has been battered this year thanks to consistently disappointing revenues and a revolving front-office door. Accounting errors forced the company in April to restate two quarterly reports from 2006, and InPhonic put up the “for sale” sign in October after it reported lagging third-quarter revenues.
Ironically, the move comes a year to the date after InPhonic announced a $100 million debt financing agreement with Goldman Sachs and Citigroup; phone distributor Brightstar Corp. also tried to help bail the company out by investing $5 million two months ago.
The bankruptcy filing lists assets of $121 million and debts of $179 million. A document filed with the Securities and Exchange Commission noted the departure this week of three members of InPhonic’s board of directors, leaving only two board members.
The SEC document discloses that “The company believes that its currently outstanding common stock has no value.”
Shares of InPhonic sank to a 52-week low of 4 cents a share before recovering to Wednesday’s closing price of 6 cents a share. The stock traded at $14.49 per share as recently as 10 months ago.