[ad_1]
MindGeek, one of the world’s largest and most controversial porn companies and the parent company of Pornhub, has been acquired by Ethical Capital Partners, a newly set-up Canadian private equity firm.
The move comes as MindGeek is being sued over sexually-explicit videos of minors found on its so-called tube sites, which much like YouTube rely on users to upload content.
Luxembourg-registered MindGeek has towered over the adult industry since the advent of video streaming. Its most recently published figures show revenues in 2018 reached $460mn while profit margins have at times neared 50 per cent, according to people familiar with the matter.
The identity of MindGeek’s former majority owner Bernd Bergmair — an ex-Goldman Sachs banker who also uses the name Bernard Bergemar — was first revealed by an FT investigation.
MindGeek has since suffered a string of criticism over its business model, causing the departure of its top management team and partial loss of access to the Visa and Mastercard payment networks.
The company was brought to the brink of collapse in late 2020 after its flagship site Pornhub was cut off by the payments networks following investigations that identified unlawful content on the platform. The company has denied allegations of wrongdoing.
Solomon Friedman, a lawyer and co-founding partner of ECP, told the FT he believed the lawsuits as well as criticism of MindGeek stemmed from a misunderstanding of how the company is now safeguarding its content, which had been spurred in part by the secrecy surrounding the previous owners.
“I want to engage regularly with stakeholders, including the media,” he said, adding that the new ownership wanted to exercise transparency.
ECP would not disclose how much it had paid for MindGeek, nor where it had raised the funds that allowed the six buyout co-founders to acquire a company that claims to have more than 115mn daily visitors to porn sites such as YouPorn and Brazzers.
Friedman said the management team of ECP, which includes lawyers and former cannabis investors, have “complete control of the acquisition and the assets”, adding that “no previous shareholders retain any ownership, right or control of the company in any way”.
The firm said MindGeek’s remaining executives would continue running the company, but would not disclose who they are.
“At this point we are not identifying the current executives, as there is an unfortunate stigma [attached to the industry],” Friedman said.
MindGeek has since confirmed that Mastercard reinstated access to its subscription sites but not for its advertising arm TrafficJunky, which was cut off by the credit card companies last year when a court ruling found Visa could be held liable for illegal content on tube sites.
Visa has, alongside MindGeek’s former owners and the company itself, been named in a lawsuit alleging that MindGeek earned money from illegal videos featuring people under the age of 18 on its user-generated sites by placing advertising next to them.
[ad_2]
Source link