HOUSTON,
Dec. 13, 2022
/PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today
announced the signing of definitive agreements to acquire two Baby
Dolls and three Chicas Locas adult nightclubs and their associated
real estate in the Dallas-Fort
Worth and Houston
markets.
The acquisition would be RCI's second largest since its founding
and one of the largest in the history of the adult nightclub
industry.
- Consideration to be paid for all transactions totals
$66.5 million, consisting of
$25.0 million in total cash; 10-year,
7% seller financing notes totaling $25.5
million; and 200,000 restricted shares of common stock based
on a per share price of $80, subject
to a lock-up, leak out agreement.
- EBITDA contribution of approximately $11 million is expected in the first year. Four
locations are open, a fifth will reopen shortly after a full
remodel, and RCI anticipates expanding operations of two of the
locations. Once the remodeling and expansions are complete, EBITDA
is expected to grow to $14-16 million
annually.
- Closing, which is expected in January, is subject to
transfer of and/or obtaining all necessary permits, licenses, and
other authorizations; and other customary closing conditions for
transactions of this kind.
Eric Langan, RCI President
& CEO, said: "This is a group of well-established,
well-run, classic Texas
gentlemen's clubs that are proven cash generators. We are pleased
to make them part of RCI's portfolio, which will bring our total to
58 clubs. We also are excited to welcome their management teams to
the RCI family. With their years of experience, they are some of
the best in the industry and will enable us to continue to grow at
an increased rate in 2023 and beyond."
Dean Reardon, RCI Management
Vice President of Operations, said: "Baby Dolls and Chicas
Locas have loyal followings among their guests and entertainers,
attract both men and women, serve liquor and food, have good
management, and fit well with our other brands in Texas."
RCI plans to discuss the acquisition in more detail on its 4Q22
Twitter Spaces conference call (click here:
https://twitter.com/i/spaces/1PlJQpoNQVaGE) and at its Meet
Management event at Rick's Cabaret New York, both currently planned
for Wednesday, December 14, 2022. See
our December 8, 2022 news release for
more details.
Club
|
Address
|
Baby
Dolls
|
10250 Shady Trail,
Dallas, TX 75220
|
Baby
Dolls
|
3601 FM157, Fort
Worth, TX 76040
|
Chicas
Locas
|
2711 Majesty Drive,
Arlington, TX 76011
|
Chicas
Locas
|
10723 Composite
Drive, Dallas, TX 75220
|
Chicas
Locas
|
6440 SW Fwy, Houston,
TX 77074
|
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (Twitter:
@RCIHHinc)
With more than 60 locations, RCI Hospitality Holdings, Inc.,
through its subsidiaries, is the country's leading company in adult
nightclubs and sports bars/restaurants. See all our brands at
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,
including, but not limited to, the risks and uncertainties
associated with (i) operating and managing an adult entertainment
or restaurant 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) the impact of
the COVID-19 pandemic, and (vii) numerous other factors such as
laws governing the operation of adult entertainment or restaurant
businesses, competition and dependence on key personnel. For more
detailed discussion of such factors and certain risks and
uncertainties, see RCI's annual report on Form 10-K for the year
ended September 30, 2021, as well as
its other filings with the U.S. Securities and Exchange Commission.
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.