Playboy to sell 50% interest in China business to United Trademark Group

Playboy (PLBY) “announced that it has entered into definitive agreements to sell 50% of its China business to UTG Brands Management Group (“UTG”), an experienced consumer brands operator in China. Upon closing, UTG will manage all operational aspects of Playboy’s business activities in China, Hong Kong and Macau. Under the terms of the agreements, Playboy will receive $122 million in total cash, including $45 million payable over two years in exchange for UTG’s acquisition of a 50% interest in the joint venture for Playboy’s China business $67 million in guaranteed minimum distribution payments over eight years, and $10 million in brand support payments over the next three years. In addition to the annual guaranteed minimum distribution payments to Playboy, which will equal or exceed its current net cash flows from China, Playboy expects to receive incremental annual distributions from its remaining ownership in the JV as UTG grows the business. UTG has paid a $9 million deposit against the purchase price, and the initial closing of the transaction is expected to occur by March 31, 2026, subject to customary closing conditions. Playboy will use a minimum of $50 million of the proceeds from the transaction to further de-leverage its balance sheet. Including the anticipated reduction in interest expense, the Company expects the transaction to be immediately accretive to earnings.”