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Playboy: Private Again—Hef Still at the Helm

Hugh Hefner has had the greatest job in the world for my entire biological life: And he isn't slowing down.

After taking Playboy public in 1971, Hefner appears to have completed a transaction to return the company to a private corporation.

New York Times DealBook is reporting that Icon Acquisition Holdings, a partnership controlled by Hefner, has made a successful buyout offer of $6.15 per share—which is 18% above Friday's closing price of $5.20 per share.

“With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company,” Mr. Hefner said in a statement. “I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world.”

Hef is 84 years old: But he seems to be gearing up for a major revamp of the brand.

Scott Flanders, Playboy's CEO, was quoted in the Chicago Sun-Times as saying: “We are transforming into a licensing model rather than trying to compete in five media segments that are all under pressure.”

The backbone of the revenue stream isn't what you might first guess.

The magazine has largely been outsourced: Production, manufacturing, circulation, and subscription management are no longer handled in-house. And the new Playboy is looking to cut costs on both television and digital media.

So what's the real cash cow in this business?

Once again, from the Sun-Times: "The fastest-growing segment of Playboy’s business—licensing the brand to be used on clothing, handbags and fragrances, for example—will continue to expand, Flanders said."

And to the revenues appear to be growing internationally.

"'We are on track to double our Asian business, and we recently expanded IMG’s representation of the Playboy brand to Europe,' Flanders said," in the Sun-Times.

China is especially hot: "The company has a $50 million deal to sell Playboy-branded clothes in China."

But of course.

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