Update: Golden Gate will soon issue a brief statement over the wires, saying that it “is not and will not be involved in any way with any potential acquisition of Playboy Enterprises Inc.” In other Playboy news, company CFO Linda Harvard has resigned.
Golden Gate Capital reportedly is mulling a bid for acquire Playboy Enterprises for approximately $300 million, in concert with former company executive Jim Griffiths. This is separate from Playboy’s reported talks with Iconix Group, although the two sides might ultimately partner up.
The possibility of this deal just goes to show that the private equity industry’s antipathy toward “sin” investing is basically buried. It wasn’t too long ago that many firms would avoid anything having to do with pornography, liquor or weapons. In fact, such restrictions were often includes in limited partnership agreements.
But now we’ve got Golden Gate interested in Playboy, Cerberus taking a rifle maker public and just about everyone buying beer companies. A handful of LPs still insist on exemptions for such deals — mostly small religious organizations — but the other investors just pick up the difference. In short, sin is in.
“I think sin avoidance probably an antiquated notion, but I’m probably going to ask [my boss] to get his thoughts,” says one Golden Gate LP. “Probably better that it’s Playboy than Penthouse.”
For what it’s worth, here are some of the esteemed organizations that would own an indirect slice of Playboy, were Golden Gate to prevail: Bain & Co., Sutter Hill Ventures, Harvard University, Yale University, MIT, Northwestern University, Princeton University, University of North Carolina, Flag Capital Management, Smith College, the James Irvine Foundation and the Andrew W. Mellon Foundation.
On a totaly separate note, a quick thought of semi-pity for any male, married Golden Gate investors, who have spent the past few weekends figuring out how their firm could improve Playboy’s sagging revenues.
At some point they’ve gotta view the company’s goods — not to mention those of its competitors — which could lead to some awkward exchanges with the wife. “But honey, it’s for work…” You should never commit $300 million to anything if you’ve spent the past few nights on a couch…