Pornhub parent Mindgeek bought by Canadian PE firm Ethical Capital

Ethical Capital Partners (ECP), a newly-founded private equity firm based in Ottawa, Canada, has announced that it has acquired MindGeek, the parent company of Pornhub.

MindGeek, founded in 2004, operates several adult entertainment sites, including Pornhub, YouPorn, Redtube, Brazzers, and others. It is one of the largest porn companies in the world, and has been the target of several lawsuits over videos of minors on its sites with sexually-explicit content.

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ECP did not disclose the financial terms of the deal. The private equity firm said it was managed by a “multidisciplinary team with regulatory, law enforcement, public engagement, and finance experience.”

Processing services issues

Last year, Mastercard and Visa stopped its payment processing services to TrafficJunky, the advertising wing of MindGeek that markets ads on Pornhub. This was after a ruling by a federal court that rejected Visa’s request not to be part of a case in which MindGeek was being sued for allegedly distributing child pornography.

MindGeek had denied allegations of wrongdoing.

$460-m revenue in 2018

In 2018, MindGeek had disclosed revenues of $460 million, and sources said the company had high profit margins. Its revenues were badly affected in 2020 when the card networks refused their services for its sites.

Also read: Mastercard, Visa investigate Pornhub business relationship

One of the founding partners of ECP said that the new owners wished to be transparent in their operations. He said that the private equity firm had complete control over all the assets of MindGeek and that no previous shareholders retained any ownership in the company.

Illegal online content

In a statement, ECP said its partners and advisers — which represent “a broad range of experts and stakeholders across law enforcement, legal, regulatory, public engagement and finance” — would work with MindGeek to “ensure its platforms are at the forefront of innovation, and trust and safety on the internet, and remain home to an inclusive global community of adult creators, performers, artists and users celebrating creative and sexual expression.” ECP also said it would invest in MindGeek to be “the internet leader in fighting illegal online content.”

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Sarah Bain, one of the founding partners of ECP, said in the statement, “We are confident that the MindGeek team and all MindGeek platforms operate with trust and safety at the forefront of everything they do. We will be engaging with stakeholders, including content creators, governments and industry to address the misalignment between how MindGeek operates and what the public perceives about this industry and these platforms. We will work with the team to ensure their commitment to trust and safety is communicated clearly with all stakeholders and the public.”

(With agency inputs)