Thu, 10/01/2020 – 09:27
The company will use the black check company Mountain Crest Acquisition in a deal worth $381 million to return to being a publicly traded company, Reuters reported on Thursday. Mountain Crest will sell $50 million of its common stock to institutional investors and the stock is expected to trade under ticker “PLBY”. Playboy is set to receive more than $100 million in cash in the deal, which will fund Playboy’s growth plans.
We first noted that Playboy was considering the plans several weeks ago. We noted then that the company was looking to shift its business model away from its iconic magazine…
…to sexual wellness products, spirits and cannabis.
The deal comes nine years after Hugh Hefner and Rizvi Traverse Management took the company private for $207 million. Hefner died in 2017 and his mansion in LA was divided into parcels of land. His son, Cooper, exited the business last year.
We noted weeks ago that Mountain Crest had raised about $50 million and is led by Dr. Suying Liu, who is head corporate strategist at Hudson Capital, which is based in Beijing.
To limit dilution, Playboy has agreed to purchase 700,000 Mountain Crest shares at $6.35 a share. According to Dow Jones, Playboy shareholders have agreed to a one-year lockup, subject to a partial release if after six months the stock has traded at $14 for 20 out of 30 consecutive days. The deal is expected to close early in the first quarter of 2021.
Pplayboy has more than $400 million in cash flows that are contracted through 2029, sexual wellness products in more than 10,000 retail stores and online and branded lifestyle and digital gaming products, the companies said in a release.
The company’s CEO, Ben Kohn, said Playboy would stop producing its iconic magazine in March of this year. Playboy remains a “media company” and has a website that carries much of the same content as the magazine did. The company now also focuses on Playboy branded products, including sex gels and CBD sprays.
After all, if the public markets aren’t for access to capital and socializing the losses of your cash burning company, what are they for?
On an unrelated note, we wonder if Playboy will stay in the postcard business.
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Author: Tyler Durden