VCG Holding Corp. Announces $7.3 Million Acquisition
March 18 2008 - 8:00AM
Business Wire
VCG Holding Corp. (NASDAQ: VCGH), a growing and leading
consolidator and operator of adult nightclubs, today announced that
it has signed an agreement to acquire a premium adult nightclub in
the west coast region of the US. The name and location will be kept
confidential until the agreement closes, which the Company expects
to occur in approximately 60 days. The transaction is contingent
upon the issuance of all applicable permits, licenses and other
customary terms. For 2007, the Club had revenue of $3.5 million and
pro forma EBITDA of $2.1 million. VCG Holding will purchase the
Club for $7.3 million, which represents a purchase price multiple
of 3.5 times pro forma EBITDA. The Company is acquiring the Club
for all cash and will fund the acquisition with cash on hand and
committed debt financing. Troy Lowrie, Chairman and CEO of VCG
Holding, stated, �We are extremely excited to have agreed to
acquire this west coast location. This acquisition has extremely
high EBITDA margins of 60% and will be highly accretive to our
earnings. We expect this transaction to add approximately $0.05 to
our annual earnings per share. We had included this acquisition in
our previous earnings per share estimates of $0.86 to $0.92 for
2008 and $1.15 to $1.25 for 2009, and our ability to close this
transaction gives us additional confidence in our ability to meet
these targets. We will provide additional information regarding
this Club upon the completion of the transaction. �In response to
many investors� questions, I would also like to update the public
on the status of the mega club acquisition announced on February
11, 2008. We have successfully completed our due diligence on the
mega club and the acquisition is in the final phase of the
licensing process. As I have previously indicated, this acquisition
is highly accretive and should increase our annual earnings per
share by $0.14. The mega club acquisition is expected to close in
approximately 45 days. The terms of the transaction remain
unchanged from our original announcement. The seller has agreed to
accept approximately half of the purchase price consideration in
the form of stock valued at $12.27 per share. Despite the recent
weakness in our stock price, the seller recognizes the upside
potential in our stock and is eager to close the sale. On a final
note, our existing clubs continue to perform very well and we look
forward to updating you on our progress when we announce earnings
in the near future.� About VCG Holding Corp. VCG Holding Corp. is
an owner, operator, and consolidator of adult nightclubs throughout
the United States. The Company currently owns 19 adult nightclubsa
and one upscale dance lounge. The nightclubs are located in
Indianapolis, IN, St. Louis, MO, Denver and Colorado Springs, CO,
Ft. Worth and Dallas, TX, Raleigh, NC, Minneapolis, MN, Louisville,
KY, Portland, ME, and Miami, FL. a Subject to one (1) nightclub
pending license approval Forward-Looking Statements: Certain
statements in this release are forward-looking statements within
the meaning of the Securities Litigation Reform Act of 1995. Such
statements are based on current expectations, estimates and
projections about the Company�s business based, in part, on
assumptions made by management. These statements are not guarantees
of future performance and involve risks and uncertainties that are
difficult to predict. Therefore, actual outcomes and results may
differ materially from what is expressed or forecasted in such
forward-looking statements due to numerous factors identified from
time to time in the Company�s reports with the Securities and
Exchange Commission, including our Annual Report on Form 10-KSB for
the year ended December 31, 2006. All forward-looking statements
attributable to us or any persons acting on our behalf are
expressly qualified in their entirety by these cautionary
statements. All guidance and forward-looking statements in this
press release are made as of the date hereof and we do not
undertake any obligation to update any forecast or forward-looking
statements, except as may be required by law.
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