WOODLAND HILLS, Calif. — The parent company of XVideos.com was the winning bidder yesterday in the sale of Penthouse Global Media’s assets.
XVideos.com’s bid for all of Penthouse’s assets — intellectual property, videos, publications, broadcasting and digital rights — amounted to $11.2 million and is subject to a bankruptcy trustee’s approval, as well as the court’s consent.
“The purchase agreement must close by 10 days, or by June 15,” Al Masse told XBIZ.
Masse is the managing principal of Broadway Advisors, which served as investment banker for Penthouse Global Media’s Chapter 11 bankruptcy case.
Masse said that more than 400 individuals representing the adult entertainment industry, current licensees and other investors had contacted his firm regarding the sale of Penthouse’s assets.
In the end, XVideos.com’s management came through with the winning dollar figure, overbidding the "stalking horse bidder," Dream Media, which said it held $10.3 million in defaulted notes and sought to acquire the company for $3 million.
XVideos.com, through parent company WGCZ S.R.O., operates numerous well-known adult brands, including BangBros and XNXX.com, along with other portals such as XXX.com, Porno.com, Swingers.com, FreePorn.com, SuckMeOff.com, Chicks.com, Vidz.com, Mess.com, Nipples.com and BigOnes.com.
Dream Media is led by media investor Adam Levin, who is CEO of Oreva Capital, a Los Angeles-based investment firm that last year bought cannabis-enthusiast magazine High Times. Oreva Capital also was involved with the management-led buyout last year of Here Publishing, which operates LGBT media brands the Advocate, Pride, Plus, Out Traveler and LGBT.com.
Penthouse Global Media, founded in 1965, publishes Penthouse Magazine and Penthouse Letters and operates eight TV channels in more than 100 countries, which account for 50 percent of its revenue.
It also has hundreds of licensing agreements in place for products and media content, as well as scores of websites.
Excluded from yesterday’s auction were Penthouse’s gentlemen’s clubs intellectual property rights used by clubs worldwide.
Yesterday, a bankruptcy judge approved trustee David Gottlieb’s motion to sell the intellectual property rights to its current licensee, Penthouse Clubs Global Licensing LLC, for $1.075 million.
Penthouse’s financial woes became apparent early this year. By April, Gottlieb said that Penthouse was administratively insolvent, operating at an ongoing loss, and that there’s no likelihood of the company’s financial rehabilitation.
Because reorganization through Chapter 11 was not feasible, Gottlieb declared that he would seek to sell Penthouse’s assets.
Kelly Holland purchased the assets of Penthouse in 2016 from FriendFinder Networks Inc., which had filed for bankruptcy in 2013.
Holland has worked in the adult entertainment industry for more than 20 years and joined Penthouse in 2006, where she helmed its broadcast division.
Holland told XBIZ that she was “extremely happy with the outcome of the auction.”
“I acquired the company for $6.5 million two-and-a-half years ago. Penthouse has now sold for $11.2 million, is debt free and poised for incredible growth,” Holland said. “The company’s operations and staff will continue in place.
"Penthouse is iconic and our production and broadcast operations, as well as our magazines, will continue to reflect the quality of the brand. I believe we’ve found the perfect partners who understand this brand and all of its amazing potential."
