Rick's Cabaret International, Inc. Signs Letter of Intent to Acquire Controlling Interest in Philadelphia Adult Club, Crazy Hors
August 09 2007 - 9:00AM
Business Wire
Rick's Cabaret International, Inc. (NASDAQ: RICK), operator of
upscale gentlemen�s clubs, said today it has signed a letter of
intent, subject to execution of definitive documents, to acquire
controlling interest in an adult nightclub in Philadelphia
currently operating as Crazy Horse Too. The 25,000 square foot club
at 2908 South Columbus Blvd., decorated in fine marble and plush
furnishings, opened in January 2006. It is located minutes from the
major Philadelphia sports complex where Philadelphia Phillies,
76ers, Flyers and Eagles games are played and near the site of a
proposed new gambling casino. Under a confidentiality clause in the
letter of intent, terms of the agreement with The End Zone, Inc.,
which owns and operates the club are not disclosed at the present
time. �This will be a significant acquisition for us and we look
forward to bringing the Rick�s Cabaret brand of upscale adult
entertainment to the Philadelphia market,� said Eric Langan,
president and CEO of Rick�s Cabaret. �The venue already has the
feel of a fine country club, but with significant changes we are
planning � including installation of a sports bar and converting
part of the venue to a high-end steak house � we believe that, once
acquired, it is capable of becoming one of our strongest performers
in terms of revenue and profit.� Terms of the proposed transaction
call for Rick�s Cabaret International, Inc. or its subsidiary to
purchase 51 percent of the outstanding stock of The End Zone, Inc.,
and for its subsidiary RCI Holdings, Inc., to acquire 51 percent of
TEZ Management, LLC and 51 percent of TEZ Real Estate, LP which
owns the building and real property where the club is located. Upon
the closing of the transaction, Rick�s Cabaret will also have a
first right of refusal to acquire the remaining interest in all
three entities. Upon signing of the letter of intent Rick�s Cabaret
began consulting with the current management of the Crazy Horse
Too. The letter of intent is subject to the execution of a
definitive agreement which will contain conditions to closing,
including, but not limited to, Rick�s Cabaret obtaining adequate
financing, approval by relevant regulatory authorities of the
transfer of ownership in the selling corporation and other
conditions consistent with transactions of this type. A closing is
anticipated to take place not later than the end of 2007. After
completion of this transaction the Philadelphia club will be
rebranded as a Rick�s Cabaret. This is the company�s third
nightclub acquisition in the past twelve months, during which time
the company has acquired venues in Ft. Worth and Austin, Texas and
also signed a licensing agreement with an operator in Buenos Aires,
Argentina. About Rick�s Cabaret: Rick�s Cabaret International, Inc.
(NASDAQ: RICK) operates upscale adult nightclubs serving primarily
business executives and professionals that offer live adult
entertainment, restaurant and bar operations. The company owns,
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.� Sexual contact is
not 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
ir@ricks.com. Forward-looking Statements: 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,
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.
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