Playboy Enterprises Inc, the lifestyle brand that is in the process of going public and known for its eponymous magazine, said on Monday it has agreed to acquire the parent company of sexual wellness chain Lovers.
The acquisition is the latest step by Playboy to shift away from its legacy media business following the shuttering of its magazine last year, and towards leveraging its famous rabbit silhouette logo to help build a consumer products brand.
The deal values Lovers-parent company TLA Acquisition Corp at around $25 million. Playboy said it expects Lover to add roughly $45 million in revenue over the next twelve months.
“The area that we think is the greatest financial opportunity right now is in the sexual wellness space. It’s a highly fragmented industry,” Playboy Chief Executive Ben Kohn said in an interview.
“We believe that with the Playboy brand, we bring a unique competitive advantage to the table to become a leader in this category,” Kohn added.
Lovers operates online as well as across 41 stores in five U.S. states, selling sexual wellness and health goods including lingerie and intimacy products. Upon closing of the deal, Lovers will sell Playboy’s sexual wellness products.
Reuters had reported that Playboy was nearing a deal for Lovers on Sunday.
In October, Playboy agreed to go public by merging with blank-check acquisition company Mountain Crest Acquisition Corp in a deal that values Playboy at $413 million, including debt.
Once the merger with Mountain Crest is completed, which is expected in February, Playboy will become a publicly traded company again, having been taken private in 2011 in a $207 million deal led by its late founder, Hugh Hefner, and private equity firm Rizvi Traverse Management.
Playboy has said it plans to use the proceeds from the deal Mountain Crest to expand into the sexual wellness space and to acquire consumer brands and platforms.
In addition to sexual wellness, Playboy is also open to acquisitions of businesses focused on streetwear apparel and men’s grooming, Kohn said.
Playboy last year ceased publication of its magazine, ending a nearly seven-decade run on newsstands that began in 1953 with a debut issue featuring Marilyn Monroe.
Source: Reuters.com