RCI Announces Agreement to Acquire a Top Gentlemen's Club in Northeast Corridor
HOUSTON – November 5, 2019 –RCI Hospitality Holdings, Inc. (NASDAQ: RICK) today announced subsidiaries have signed definitive agreements to acquire the assets and related real estate of a well-established, top gentlemen's club located in the Northeast Corridor for $15.0 million.
Under the terms of the agreements, RCI subsidiaries will pay $7.2 million for the club and $7.8 million for the real estate using $4.0 million in seller financing at 6.0% for the club with the balance of cash from an anticipated $11.0 million bank loan at a blended rate of 6.25%.
RCI has agreed not to disclose the club's name and location until closing, which is subject to transfer of all necessary permits, licenses and other authorizations, and usual closing conditions for transactions of this kind, including due diligence.
The club, which has been in business close to 20 years, has a full liquor license, is open seven days a week, and is located in a top 10 metro and sports market that is also known for being a major business, financial and convention center.
"This club fits perfectly with our goal of acquiring profitable number one locations with a long history of cash flow," said Eric Langan, President & CEO, of RCI. "As a $2.4 million EBITDA club, the 100% financed acquisition is clearly in line with our capital allocation strategy in terms of valuation and cash on cash return."
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
p>With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country's leading company in gentlemen's clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas/Ft. Worth, Houston, Miami, Minneapolis, St. Louis, Charlotte, Pittsburgh, and other markets operate under brand names, such as Rick's Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars, Tootsie's Cabaret, and Scarlett's Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar. Please visit http://www.rcihospitality.com
This press release may contain 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 press release, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) our ability to maintain compliance with the filing requirements of the SEC and the Nasdaq Stock Market, and (vii) numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. The company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.
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