Talks to sell a majority stake in OnlyFans are being led by Moelis & Co., the investment bank founded by Wall Street legend Ken Moelis, The Post has learned.
Moelis bankers engineered the potential deal for the money-minting smut site – in which San Francisco-based Architect Capital could take a 60% stake in a tie-up that values it at $3.5 billion – after at least one other bank shied away from representing OnlyFans, said a source familiar with the matter.
Moelis – whose 68-year-old, billionaire founder was a protege of junk bond king Michael Milken – hopped into bed with OnlyFans after the London-based porn platform failed to find an eligible suitor over much of the past year, said two people with knowledge of the potential deal.
Ditto for top-tier investment banks, who proved to be squeamish about dirtying their hands with the porn business, insiders said.
“The company had been struggling to find a buyer largely because of the porn stigma. But it has incredible financials that are very attractive,” one of the sources told The Post.
“Everyone has to make decisions about balancing business potential with negative associations and Moelis has made their feelings clear.”
Moelis, Architect and OnlyFans declined to comment.
OnlyFans has faced legal problems for years. In one high-profile case, a woman claimed in a 2022 Florida lawsuit that she was raped by two men who posted a video of the act to OnlyFans, charging a monthly subscription to view it. The plaintiff said OnlyFans violated the Trafficking Victims Protection Act by facilitating the publishing of the video and for profiting off it.
OnlyFans disputed the allegations and a judge ultimately dismissed the claims, citing Section 230 of the US Communications Decency Act that broadly protects websites from liability for user-generated content.
In 2023, a whistleblower filed a complaint with the US Treasury Department’s Financial Crimes Enforcement Network alleged Mastercard and Visa failed to stop their networks from laundering funds from child sexual abuse material and sex trafficking on OnlyFans, according to a Reuters report.
A Mastercard spokesman said the credit card giant has zero tolerance for illegal activity on its network. Visa didn’t immediately respond to a request for comment.
A spokesperson from Treasury’s FinCen unit declined to comment on confidential whistleblower submissions but said it works with financial institutions and law enforcement to prevent illicit activity.
Moelis is now at the center of deal talks with Architect, details of which were reported last month by The Wall Street Journal.
“It’s not surprising that mainstream financial institutions are finding the impressive financials of so-called vice companies too enticing to pass up,” said Catharine Dockery, the founder and general partner of New York-based Vice Ventures, which invests in startups in stigmatized industries including alcohol, psychedelics and sex products.
In the venture market, investors are increasingly warming up to businesses that were historically shunned, she added.
Moelis is led by Navid Mahmoodzadegan, one of the bank’s co-founders, after Moelis stepped down as CEO last fall, moving into an executive chairman role.
Architect’s top brass is no stranger to controversy. Founder and CEO James Sagan has been a key investor in e-cigarette company Juul Labs, which was blamed for igniting a teen vaping crisis and weathered years of legal battles.
Architect’s head of technology, Hoan Ton-That, joined the firm last year after founding Clearview AI, which has scraped millions of photos off Facebook and LinkedIn and sold them to law enforcement agencies. The company has been banned in multiple countries in Europe, as well as in Australia, according to government rulings in those countries reviewed by the Post.
OnlyFans earned $666 million in operating profit on $1.4 billion in revenue in the year ended Nov. 30 2024, according to UK corporate filings. The company logged $449 million of sales costs and $197 million of administrative expenses. OnlyFans had only 46 employees, the filings show. About 64% of its revenue is generated in the US.
OnlyFans owner Leo Radvinsky, who purchased a majority stake in 2018 for an undisclosed amount from its British founders Tim and Guy Stokely, has earned nearly $1 billion in dividends over a two-year period ending Nov. 30, 2024, the filings show.
OnlyFans takes a 20% cut from its roughly 4.6 million creators, per the filings and the site is not on App stores so no revenue is shared with Apple or Google.
Still, a report this year by payment processing company Myntpay found that merchants offering adult content get dinged with higher transaction fees – often 5-10% per transaction compared to 2-3% for traditional e-commerce – which can translate to a price discount come time for a sale or public listing.
OnlyFans, which is owned by parent company Fenix International Ltd, had engaged in talks for a sale last year at an $8 billion valuation to a group of investors led by Los Angeles investment firm Forest Road Company. That deal never came together.
Credit: Source link
