Photo: image via TheWrap.com
Ken Li of The Financial Times spoke with Marc Bell, CEO of FriendFinder Networks (which owns Penthouse magazine) about how he would turn Playboy around if his $210 million bid to buy the adult magazine and entertainment empire succeeds in the face of Hugh Hefner’s own $185 million proposal to take the company private.Bell laid out the plan during a sit-down interview with Li last week, which was briefly interrupted by a phone call from Bell’s mother. (Who apparently used to work for him?)
Mr Bell’s plan relies on applying the strength of his FriendFinder Networks to Playboy‘s small handful of websites, which alone could double Playboy’s earnings before interest, tax, depreciation and amortisation, generating an incremental $25m, before factoring in any cost cuts.
In the next three years, Playboy’s ebitda could reach $100m in his plan.
To finance the deal, Mr Bell estimated that the combined cash flow from both companies, of about $150m, could give the company the capacity to raise about $750m.
That would free up $150m in excess debt capacity as the gross debt of the combined companies is about $600m.
That is, assuming Hef doesn’t completely ignore Bell’s offer, which seems unlikely. But who knows…
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