Playboy (NASDAQ:PLBY) saw its share price jump 26% on Monday after unveiling a transaction to sell half of its China business to United Trademark Group (UTG) in a deal structured as $122 million in total cash payments.
Under the agreement, UTG will acquire a 50% interest in Playboy’s China operations and make an initial cash commitment of $45 million payable over two years. In addition, Playboy will receive $67 million in guaranteed minimum distribution payments spread over eight years, and $10 million earmarked for brand support over the next three years. UTG has already provided a $9 million deposit, and the companies expect the initial closing to occur by March 31, 2026.
As part of the deal, UTG will assume management responsibility for all operational aspects of Playboy’s activities in China, Hong Kong, and Macau. Playboy described the arrangement as consistent with an asset-light approach that preserves potential upside through its remaining 50% ownership stake. The company also said it expects to benefit from additional annual distributions beyond the guaranteed payments as UTG expands the business.
"We are partnering with UTG, a globally respected operator with a strong track record stewarding leading international brands in China," said Ben Kohn, Chief Executive Officer of Playboy. "Partnering with UTG allows them to make a meaningful investment in the future of the brand in China, positioning Playboy for sustained, long-term growth in one of the world’s most important consumer markets."
Playboy indicated it will allocate at least $50 million of the proceeds toward debt reduction. The company expects this use of proceeds will render the transaction immediately accretive to earnings.
The deal consolidates operational control with a local operator while leaving Playboy positioned to capture upside from ongoing distributions and ownership of the remaining 50% stake. Beyond the headline payment schedule, the company highlighted that the guaranteed distributions cover an eight-year period and that brand support funding will be provided over three years.
Key transactional milestones include the $9 million deposit already paid by UTG and the targeted initial closing date of March 31, 2026. Playboy's public communications present the deal as consistent with its broader strategic shift toward an asset-light model and a priority to strengthen the balance sheet through debt reduction.