Hardcore investing: asking Marc Bell about his recent move to acquire controlling interest in Penthouse magazine is like asking him what he had for dinner two weeks ago Tuesday. It's just another deal for this 36-year-old South Florida financier. But what a deal

South Florida CEO, June, 2004 by Barbara Perkins

* "Ask any male between the ages of 16 and 99 what Penthouse magazine is and they can tell you," says Marc Bell. And with that in mind, Bell, managing partner of Boca Raton-based Marc Bell Capital Partners, decided to go after the title when the magazine's parent company General Media filed for bankruptcy last year.

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"They were in bankruptcy, their bonds were trading for pennies and nobody wanted the company," says Bell. "It was going to be liquidated and we figured it was a great buy."

Given the enormous recognition for the Penthouse brand, Bell formed a partnership for the acquisition, called it PET Capital Partners (as in, "pet of the month") then led his team in amassing 89 percent of the magazine's $50 million in bond obligations. "We didn't buy the company, we bought the debt," says Bell, whose group also made a $7 million debtor in possession (DIP) loan to keep the magazine operating while a bankruptcy reorganization plan was put together.

With its debt in hand--along with most of General Media's preferred stock--Bell made plans to transform the title into something a little less hardcore (over-the-top raunchiness was one reason posited for Penthouse's drop in circulation in recent years) and a little more like successful men's magazine Maxim. Before that could happen, however, Mexican investor Luis Enrique Fernando Molina made a run at the deal. On the very day that Penthouse founder and publisher Bob Guccione was due to be evicted from his posh Manhattan townhouse, Molina bought it for a reported $24 million, then leased it to Guccione for $1 per year. With Guccione's backing, Molina offered his own, competing reorganization plan.

The surprise appearance of Molina was not entirely out of the blue. Molina, whose family sold its Pepsi bottling franchise in Mexico two years ago for $885 million, was the owner of 99 percent of Penthouse International's common stock. Penthouse International, which did not file bankruptcy, owned General Media, which in turn owned the Penthouse trademark and magazine. With its prized possession about to slip away, Molina intervened.

The tussle over Penthouse was finally resolved in April, again with last-minute timing. PET's plan of reorganization was withdrawn on the eve of its confirmation by the bankruptcy court in favor of Molina's plan, in exchange for Molina's commitment to pay Bell $70 million: $10 million for 75 percent of General Media's preferred stock and $60 million for the DIP loan and the bonds which PET held.

"He [Molina] could have bought the bonds a long time ago and saved himself a lot of grief, but if you're a billionaire, I guess it doesn't matter," says Bell. As for his profit, Bell remains tight-lipped, saying only that the original deal to buy the debt was cut for "pennies on the dollar." The transaction is due to close in August.

While the Penthouse affair was worthy of headlines, it's just the latest in a long string of deals put together by Bell. He first grabbed global headlines in 2001 when he left Globix, a hugely successful Internet infrastructure and services provider he founded at the ripe old age of 21. At the time it was reported that the former Internet whiz kid had cashed out for a cool $100 million in shares.

But it seems that, too, was just another blip on the screen for the affable Bell, who's started and sold more than a dozen companies over the past thirteen years. Bell himself half jokingly checks a crib sheet as he ticks off examples of some of those ventures, which include: NAFT International, one of the largest providers of desktop publishing systems in New York; Internet provider PFM Communications; NY Weekly, the largest weekly newspaper on Manhattan's upper East and West sides; and Gamenet, a company which pioneered the use of Internet Protocol for Macintosh computer games.

"I'm a serial entrepreneur. I sold stuff, I started stuff, I sold stuff," he says. It was a progression that happened throughout the years, says Bell, with little publicity. "I just got unlucky enough one year that someone decided to finally write about it."

After moving to South Florida from New York two years ago, Bell last year launched Marc Bell Capital Partners, a private equity firm. Its focus: investing in distressed assets. As for the Penthouse deal, if it doesn't close in August, Bell and his group may end up with the company again. Then what? "I'm not interested in becoming a pornographer," says Bell. "If this doesn't work out we'll just find someone else to buy it."