PE Buyers Muted On Playboy
The media empire is reportedly being shopped for $300 million, despite travails facing the industry.
May 22, 2009
Playboy Enterprises is reportedly on the block, though private equity firms are believed to be reluctant to overbid for prestigious media buys in the current environment. Several high-profile acquisitions in recent years have failed to justify the purchase prices that were received.
The lifestyle media company, founded by Hugh Hefner, is being shopped for about $300 million, according to The New York Post. With a present market cap of $95.87 million, the asking price is a challenging sale, given its significantly lower public valuation.
In April, Maxim magazine's UK print edition was shuttered. The magazine, founded by publishing billionaire Felix Dennis, was sold to Quadrangle Capital Partners in August 2007 for about $240 million. While the magazine’s US edition and other international editions continue to be published, the transaction appears to have been a stellar failure for Quadrangle that other media buyers may consider before bidding for Playboy.
According to a RBC analyst report obtained from ThomsonOne Analytics, Playboy has made several editorial changes to its print and online products that could lead to cost savings and greater revenue. The report noted that the publishing company “is finally making the kind the kind of structural changes that have been necessary for years.”
In recent years there have been a string of publishing plays by private equity firms. In October 2008, Los Angeles-based OpenGate Capital bought TV Guide magazine from Macrovision Solutions Corp. The Beverly Hills-based private equity firm Platinum Equity bought The San Diego Union-Tribune in May 2009. In August 2006, private equity firm Elevation Partners acquired a stake in Forbes.
Some recent publishing bids have been affected by publishing industry and financing difficulties. In July 2008, Entrepreneur Media Inc., publisher of the like-name magazine, nixed its sale of the company to Castanea Partners Inc. and Austin Ventures after financing issues arose.
In December 2008, Hugh Hefner’s daughter Christie stepped down as chief executive of Playboy.
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