Benzinga | Feb 1, 2021 08:11AM EST

Mountain Crest Acquisition Merger Partner Playboy Acquires TLA Acquisition Corp.

LOS ANGELES, Feb. 01, 2021 (GLOBE NEWSWIRE) -- Playboy Enterprises, Inc. (the "Company" or "Playboy"), one of the largest and most recognizable lifestyle brands in the world, today announced that it has entered into a definitive agreement to acquire TLA Acquisition Corp., the parent company of the Lovers family of stores ("Lovers") and a leading omni-channel online and brick-and-mortar sexual wellness chain, with 41 stores in five states. Lovers will further expand Playboy's brand portfolio, digital commerce, and direct-to-consumer product sales capabilities, and provide an opportunity to capitalize on the important brick-and-mortar distribution channel that Lovers' retail stores represent. The acquisition is expected to close in the first quarter of 2021.



"The acquisition of Lovers represents yet another step in our growth as the leading platform for pleasure and leisure, and as the trusted provider for the sexual wellness consumer," said Ben Kohn, CEO of Playboy, soon to be renamed PLBY Group upon the close of the Company's merger with Mountain Crest Acquisition Corp (NASDAQ:MCAC) ("Mountain Crest"). "Building upon our significant year of growth in digital commerce, we're excited to complement our existing line of sexual wellness products with an expanded D2C product portfolio, and to enhance our distribution platform with a new digital commerce store and a strong brick-and-mortar footprint focused on the sexual wellness consumer. Brick and mortar is a critical part of our distribution strategy in Sexual Wellness as it currently represents almost 70% of the category and is key to product discovery for consumers. We are also thrilled to welcome Barbara Cook, a highly respected leader in the retail and consumer products arena, and the whole Lovers team to Playboy. We look forward to continuing to deliver superior retail experiences to Lovers' dedicated customers and to accelerating the growth of all of our businesses with these new shared capabilities and product offerings. Excluding one-time expenses associated with the deal, we expect this deal to be accretive for our shareholders."

The Company has signed a definitive agreement to acquire 100% of the equity of Lovers for a purchase price of approximately $25M of cash. Lovers is expected to contribute approximately $45M of revenue over the next twelve months. The acquisition is part of the Company's comprehensive business plan to expand its brand portfolio and to offer consumers a wide variety of products that comprise the Sexual Wellness category via an omnichannel distribution strategy. Upon close, Lovers will immediately begin selling Playboy's sexual wellness products. Recent customer research conducted by the Company showed that 60% of Playboy's consumers think Playboy should represent sexual wellness, with 25% of consumers more likely to purchase a sexual wellness product sold by Playboy. With the acquisition of Lovers, the Company's product portfolio will be expanded to include new owned-and-operated and curated offerings in bedroom accessories, lingerie, and sexual health categories. In addition, Lovers will bring proven merchandising, retail operations capabilities, and backend infrastructure.

Barbara Cook, CEO of Lovers, said, "We're very proud of Lovers' growth and consider this timely transaction with Playboy, as we celebrate our 40th anniversary, to be a huge step forward as well as a testament to the hard work of our entire team. Playboy's mission of 'Pleasure for All' organically aligns with the values and mission that we have developed at Lovers, and we are eager to join the Playboy family to provide an even larger customer base with the expertise and products that can enhance their sexual wellness and pleasure offerings."

Ms. Cook took the helm at Lovers in April 2019, after serving in senior corporate and operational leadership roles across globally recognized consumer products and retail brands, including Gap Inc., Starbucks, T-Mobile, and Hudson Jeans.

Playboy recently announced that it intends to change its parent company's name after the completion of its proposed business combination with Mountain Crest to PLBY Group, Inc. to reflect its expansion into a leading global pleasure and leisure platform.