The new owner of Pornhub’s parent company says it won’t release the names of the executives heading Mindgeek because the porn sector has an “unfortunate stigma.”
MindGeek was acquired by Ethical Capital Partners (ECP), a Canadian private equity firm founded last year, for an undisclosed price on Thursday. It also owns YouPorn, Redtube, and Brazzers, as well as Pornhub, one of the world’s most popular websites.
At the time of the announcement of the acquisition, Solomon Friedman, a lawyer and co-founding partner of Ethical Capital, said the management team, 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 equity firm also said MindGeek’s remaining executives would continue to run the company but would not reveal their identities.
“At this point we are not identifying the current executives, as there is an unfortunate stigma [attached to the industry],” Friedman said.
Friedman stated that he believed the MindGeek lawsuits and criticism originated from a misunderstanding of how the company is currently securing its information, which was exacerbated in part by the previous owners’ secrecy.
“I want to engage regularly with stakeholders, including the media,” he said, adding that the new ownership wanted to exercise transparency.
Ethical Capital will not reveal the identity of its investors, but a representative stated that they do not include former MindGeek owners Bernd Bergmair, Feras Antoon, and David Tassillo, who will no longer be involved in the company.
MindGeek was embroiled in scandal three years ago after reports that young women’s movies emerged on its platforms, prompting Visa and Mastercard to cut relations, Canada’s parliament to open an investigation, and the firm to seek a buyer. In response, Prime Minister Justin Trudeau’s government approved a proposal to crack down on damaging online content, but the proposals were condemned as being overly draconian, and the project has now dropped farther down the legislative schedule.
Ethical Capital was founded last year and claims to be focused on technology companies with “legal and regulatory complexity and a value on transparency and responsibility.” It is led by cannabis entrepreneur Rocco Meliambro and criminal lawyer Fady Mansour, who is described as a managing partner. Derek Ogden, a retired Royal Canadian Mounted Police chief superintendent, is also a partner in the firm. Both Meliambro and Ogden were involved with Meta Growth Corp, a cannabis retailer that was acquired in 2020 by High Tide Inc.
“The adult entertainment industry will always be the subject of significant legal and regulatory scrutiny,” Ogden said in the statement. “Our pre-close reviews revealed that MindGeek operates legally and responsibly. We look forward to communicating the path forward for MindGeek and its holdings.”
In the released statement, the equity firm touted that its acquisition will “add to the success that [MindGeek] continues to build” through, apparently, state-of-the-art tech and intellectual property investments.
Is Ethical a scam?
Twitter user Evan Armstrong posted a thread itemizing his arguments on why the new MindGeek owner or the supposed acquisition of the firm is a scam.
“With something that valuable [purchasing MindGeek] you would expect ECP to be a big, experienced fund right?” Armstrong tweeted. “Wrong. Not a SINGLE ONE of their employees has ever worked in private equity before. None of them have ever worked in technology before. None of them have publicly worked at the fund for longer than 6 months.”
He also insinuated Meliambro’s cannabis experience being unrelated to MindGeek’s industry.
Armstrong also purported that the equity firm doesn’t even exist to begin with, having searched for it in “both the U.S. and Canadian Investment registration databases.”
Though MindGeek’s legal headquarters are in Luxembourg, the majority of its operations are centered in Montreal. According to traffic tracking firm Similarweb, Pornhub was the 12th most visited website in the world last year.
The acquisition of MindGeek is Ethical Capital’s first transaction.
Information for this briefing was found via Bloomberg, Financial Times, Insider, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
