Playboy is gearing up to hopefully bring some pleasure soon to investor portfolios.

The company — founded by iconic sex symbol Hugh Hefner in 1953 —announced Thursday it will merge with SPAC Mountain Crest Acquisition Corp. in a deal that values Playboy at $415 million. The timing of Playboy’s return to the public markets wasn’t disclosed. It will boast $100 million in cash on the balance sheet after the transaction is completed.

Playboy will continue to be led by current CEO Ben Kohn, a Wall Street veteran with stints at Cowen & Company and private equity shop Rizvi Traverse.

Following several years of financial struggles and a sagging stock price, Playboy was taken private in 2011 for $205 million by a holding company controlled by Hefner (who died in 2017) and Rizvi Traverse (where Kohn is still a managing partner). Under private ownership, Playboy has pivoted into the streetwear and consumer accessories businesses and stopped printing its flagship magazine earlier this year.

Kohn joined Playboy as CEO in 2017, and will now look to reintroduce the brand to investors who may think it still makes glossy magazines featuring scantily clad women and sells them from inside the Playboy Mansion (billionaire Daren Metropoulos bought the Playboy Mansion in 2016 for $100 million).

“I saw in Playboy the biggest opportunity of my career. Playboy is huge,” Kohn said in a document detailing the transaction obtained by Yahoo Finance.

Here are the key details of Kohn’s reintroduction plan for Playboy, per the document obtained by Yahoo Finance.

The pitch

Playboy’s business model — underpinned by it licensing out its well-known name — is focused on exploiting four areas: (1) sexual wellness; (2) style and apparel; (3) gaming and lifestyle; and (4) beauty and grooming.

Sexual wellness products such as lingerie and new intimacy products like body spray that have rolled out to 10,000 CVS and Walmart stores will make up 40% of Playboy’s sales in 2020. The other main chunk of Playboy’s business — 50% to be exact — is fashion and accessories for men and women globally. Some of Playboy’s fashion collaborations could be found at Urban Outfitters, Nordstrom and Macy’s-owned Bloomingdale’s.

“Over the past two years, we shut down almost all of our legacy media businesses, grew our Gen Z and Millennial customer base with new product launches, built out direct-to-consumer capabilities, and grew our licensing business to over $400M in forward-booked cash flows. We also introduced new owned and operated product lines in the US – a key part of our strategy to capture a greater share of consumer spend against the brand,” says Kohn.

Meantime, Playboy has recently debuted fragrance and cosmetics lines for men and women in Germany and the UK. A new home collection just debuted at Wayfair.

The financials

“The business of selling pleasure,” as Playboy executives mention frequently in the document, appears to be beginning to pay off. While Playboy was light on financial disclosures in the document, directionally the business looks to be in better shape compared to the one taken private in 2011:

  • $400 million in forward-booked cash flows for the company’s licensing business.

  • 68% expected revenue growth in 2020 (no total revenue number shared).

  • A doubling in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2020 vs. 2019.

  • $100 million adjusted EBITDA goal in 2025.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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