Rick's Cabaret International, Inc. Signs Agreement To Purchase The Executive Club In Dallas
HOUSTON - (March 5, 2008) - Rick's Cabaret International,
the premier publicly traded operator of adult night clubs, said today it has signed a definitive agreement to buy The Executive Club, an 18,000-square foot gentlemen's club and the real estate on which it is located in Dallas (8550 North Stemmons Freeway) for a total purchase price of $9.5 million.
Rick's Cabaret will purchase The Executive Club for $3.8 million, to be paid with the issuance of 152,082 shares of restricted common stock of Rick's Cabaret. As part of the transaction, Rick's Cabaret will also purchase the real estate on which the club is located for an additional $5.7 million, payable with $4.25 million in cash and the issuance of 57,918 shares of restricted common stock. The stock has been valued at $25 per share.
The transaction, which includes a "lock up/leak out" provision governing the number of shares that can be sold in given periods, is scheduled to close on April 30, or ten days after the approval and transfer of required licenses and permits. The transaction is subject to certain closing conditions, including but not limited to Rick's Cabaret obtaining adequate financing, approval by relevant regulatory authorities of the transfer of ownership in the selling entities and other conditions consistent with transactions of this type.
Eric Langan, President and CEO of the company, said: "The transaction is consistent with our strategy of buying solid properties in major metropolitan areas, and is within our target price range of three to five times EBITDA. We are also fortunate to be able to acquire a piece of prime real estate along with the club, which protects our interests and creates additional value over time."
The Executive Club located on the main north-south artery of Dallas just north of the downtown area, features a first-class restaurant, an executive level with VIP lounges and sky boxes, multiple plasma screen television screens for viewing major sports events.
The purchase would bring to 16 the number of clubs owned and operated by the company. (The pending acquisition of the Crazy Horse Too Cabaret in Philadelphia would bring the total to 17 when the purchase is completed.)
Rick’s Cabaret International, Inc. (NASDAQ: RICK) operates upscale
adult nightclubs serving primarily businessmen and professionals that
offer live adult entertainment, restaurant and bar operations. The company
owns and operates or licenses adult nightclubs in New York City, New Orleans,
Charlotte, Houston, Minneapolis and other cities under the names "Rick's
Cabaret," "XTC" and "Club Onyx." No sexual contact
is permitted at any of these locations. Rick's Cabaret also owns the adult
Internet membership Web site, couplestouch.com,
and a network of online adult auction sites under the flagship URL naughtybids.com.
Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK.
For further information contact [email protected].
This document contains forward-looking statements that involve a number
of risks and uncertainties that could cause the company's actual results
to differ materially from those indicated in this document, including:
the risks and uncertainties associated with operating and managing an
adult business; the business climates in New York City and elsewhere;
the success or lack thereof in launching and building the company's businesses
in New York City and elsewhere; the Company's ability to identify and
secure suitable locations for new nightclubs on acceptable terms, open
the anticipated number of new nightclubs on time and within budget; achieve
anticipated rates of same-store sales; hire and train additional nightclub
personnel and integrate new nightclubs into its operations; unexpected
increases in costs of sales or employee, pre-opening or other expenses;
the economic conditions in the new markets into which the Company expands
and possible uncertainties in the customer base in these areas; fluctuations
in quarterly operating results; the impact of any negative publicity or
public attitudes; competitive pressure from other national and regional
nightclub chains; risks and uncertainties related to the operational and
financial results of our Web sites, conditions relevant to real estate
transactions, and numerous other factors such as laws governing the operation
of adult entertainment businesses, competition and dependence on key personnel.
Rick's has no obligation to update or revise the forward-looking statements
to reflect the occurrence of future events or circumstances. For further
information go to www.ricks.com.
for further information: Allan Priaulx, 212-338-0050, [email protected]