HOUSTON, May 9, 2017 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today announced the $25.95 million acquisition of Scarlett's Cabaret
Miami, considered one of the best gentlemen's clubs in the
country.
The 25,000 square foot Scarlett's is located between
Fort Lauderdale and Miami in a high visibility location right off
the Hallandale Beach exit of
Interstate 95, the major north south highway through Miami-Dade, Broward, and Palm
Beach counties.
Eric Langan, RCI President and
CEO, said, "We're excited about Scarlett's Cabaret Miami joining
our portfolio of high quality clubs in key markets.
"It is a different kind of venue, combining a high-energy
Miami/Las Vegas style nightclub that attracts both
male and female customers for drinks, dining and dancing, with a
high-end gentlemen's club, featuring beautiful entertainers every
night. Scarlett's also tends to attract a different clientele from
our 74,000 square foot Tootsie's Cabaret, which is five miles
south, making the two clubs complementary to each other.
"Scarlett's is generating about $13
million in trailing 12 months revenues, producing an
estimated Adjusted EBITDA of more than $6
million. Based on these results and how we have structured
the transaction, the club should yield an initial cash-on-cash
return in line with our capital allocation strategy."
Key Terms
- Total consideration of $25.952
million for an RCI subsidiary to acquire 100% of the stock
of JW Lee, Inc., which owns Scarlett's Cabaret Miami and has a
21-year lease on the property.
- Immediate payment of $5.4
million, payment of $5.0
million in six months, and a $15.552
million 12-year amortizing note at 8.00% in seller
financing.
- The acquisition includes the Scarlett's Cabaret name, which RCI
plans to license nationally to other cabarets.
- For tax purposes, the parties have elected to treat the
transaction as an asset purchase, which would enable RCI to use
straight line depreciation on the goodwill for 15 years, under
current law, lowering future tax costs and enhancing cash
flow.
- Closing took place yesterday.
"Scarlett's has a long, successful track record," Mr. Langan
said. "Along with Tootsie's, it has consistently ranked as one of
the best clubs in Florida as well
as nationally.
"Geographically, it expands our presence in the attractive
South Florida market, enabling us
to own two of the best and largest venues, with close to 100,000
square feet combined. Having them in relatively close proximity is
expected to enhance and improve the cost effectiveness of our
marketing, purchasing and operations.
"Compared to other clubs in our portfolio, in physical size,
Scarlett's is second to our largest club, Tootsie's Cabaret, while
its revenues rival Rick's Cabaret New York, our second largest
revenue generating unit.
"Scarlett's has seasoned local management who will remain and
report to Ed Anakar, President of
RCI Management Services Inc. Ed, who is based in Miami, will supervise Scarlett's integration
into our organization. Ed was instrumental in bringing Rick's
New York and Tootsie's into the
fold after they were acquired, and building them into RCI's top
contributors."
Scarlett's Cabaret Miami—More Details
- State of the art light show, décor and dance floor
- Full liquor, five bars, eight stages, sky boxes, and abundant
VIP seating
- Open Sunday from 5 PM to 6 AM,
Monday-Wednesday 12 PM to 6 AM,
Thursday 12 PM to 7 AM, and
Friday-Saturday 12 PM-8 AM
- Lunch, late night dining, and breakfast menu
- Visit http://scarlettscabaret.com/
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
With 44 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, Miami,
Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis and other cities operate under
brand names, such as "Rick's Cabaret," "XTC," "Club Onyx," "Vivid
Cabaret," "Jaguars" and "Tootsie's Cabaret." Sports
bars/restaurants operate under the brand name "Bombshells." Please
visit http://www.rcihospitality.com/
Forward-Looking Statements
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 the risks and uncertainties
associated with operating and managing an adult business, the
business climates in cities where it operates, the success or lack
thereof in launching and building the company's businesses, risks
and uncertainties related to cybersecurity, 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. The company has no
obligation to update or revise the forward-looking statements to
reflect the occurrence of future events or circumstances.
Media & Investor Contacts
Gary Fishman and Steven Anreder at 212-532-3232 or
gary.fishman@anreder.com and steven.anreder@anreder.com
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SOURCE RCI Hospitality Holdings, Inc.