• by Erik Sass  @eriksass1, January 10, 2011

Playboy Enterprises is going private, following an announcement that Icon Acquisition Holdings (an investment group run by Playboy founder Hugh Hefner) will buy the beleaguered mag publisher for $6.15 per share, giving the company a total value of $177 million.

This share price represents a premium of about 18% above its Friday closing level of $5.20, and 53% above its price on July 9, 2010, before the deal was first proposed by Hefner, with an initial offer of $5.50 per share.

The deal is expected to close before the end of the first quarter.

Under the terms, Hefner will acquire all outstanding Class A (voting) and Class B (non-voting) shares in Playboy Enterprises. He currently owns 69.5% of the Class A shares and 27.7% of the Class B shares. Rizvi Traverse Management will provide funding for the deal, with Jefferies & Company handling financing and Lazard serving as financial adviser.

Tracing the history of the magazine from its founding in 1953 through going public in 1971 down to the present, Hefner stated: "With the completion of this transaction, Playboy will come full circle, returning to its roots as a private company. I believe this agreement will give us the resources and flexibility to return Playboy to its unique position and to further expand our business around the world." Hefner remains the editor-in-chief and chief creative officer of Playboy Enterprises.

Like other magazine publishers, the venerable purveyor of cheesecake took its share of hits over the last couple of years, although it appeared to rally in 2010.

Over the last decade, total subscriptions fell 47.3% from 2,829,502 in the six-month period ending June 2002 to 1,491,504 in the six-month period ending June 30, 2010, according to the Audit Bureau of Circulations. Single-copy sales plunged 65% from 387,767 to 137,053 over the same period.

On the advertising front, Playboy's total ad pages fell 47% from 584 in 2002 to 311 in 2009, according to the Publishers Information Bureau. However, in the first nine months of 2010 ad pages rose 28.1% to 264, per the PIB.