Playboy slips into something less comfortable

ConnectM Technology Solutions

01/10/2020 20:21

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By John Foley
    NEW YORK, Oct 1 (Reuters Breakingviews) - No longer a
purveyor of adult magazines, the late Hugh Hefner’s empire is
using a SPAC to return to the stock market – ahead of a possible
reinvention as an M&A-driven conglomerate. The idea is
attractive enough, but the public gaze won’t be any more
forgiving this time around.
    Full view will be published shortly.
    On Twitter https://twitter.com/johnsfoley
    
    CONTEXT NEWS
    - Playboy Enterprises plans to return to the stock market
through a merger with a listed acquisition vehicle, Mountain
Crest Acquisition, that would value the entertainment company at
$381 million, including debt. 
    - The merger announced on Oct. 1 would leave Playboy with
just over $100 million in cash, roughly half provided by
Mountain Crest and the rest by new investors.
    - The companies believe Playboy can hit $100 million of
recurring EBITDA within five years, compared with $11.7 million
in 2019, by expanding in areas like sexual wellness, beauty and
skincare, and exploiting partnerships with celebrities including
Kylie Jenner and music artist Lizzo.
    - Playboy’s revenue is expected to hit $131 million in 2020,
compared with $78 million in 2019. That includes the impact of
acquiring Yandy, an underwear retailer, in 2019. The eponymous
adult magazine stopped being printed in early 2020.
    - Playboy was acquired in 2011 by founder Hugh Hefner and
private equity firm Rizvi Traverse for $207 million. At the
time, the company expected full-year revenue of $216 million,
according to a deal filing.
    - For previous columns by the author, Reuters customers can
click on  FOLEY/ 
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Playboy in deal to return to stock market after nine years   
 urn:newsml:reuters.com:*:nL4N2GS28A
Merger presentation    https://s26.q4cdn.com/895475556/files/doc_presentations/Playboy-Presentation.pdf
BREAKINGVIEWS-Corona Capital: Playboy, Mondelez     urn:newsml:reuters.com:*:nL5N2GI1FN
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Jennifer Saba and Amanda Gomez)
 ((john.foley@thomsonreuters.com; Reuters Messaging:
john.foley.thomsonreuters.com@reuters.net))