RCI Announces Acquisition of VIP's Gentlemen's Club of Chicago; to Be Rebranded Rick's Cabaret
HOUSTON – November 2, 2018 – RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today announced subsidiaries have completed the acquisition of VIP's Gentlemen's Club and its real estate at 1531 N. Kingsbury St. in Chicago on the same terms as previously announced.
Plans include renaming the club Rick's Cabaret; positioning it as a premier establishment similar to the No. 1 Rick's location in New York City, which attracts local, national and international guests; opening three hours earlier, at 4 PM, in the coming weeks; and opening for lunch in early 2019.
"Chicago is perfect for the Rick's brand," said Eric Langan, President & CEO of RCI. "It is a major metro market and business hub, features leading teams in pro sports, and is a top convention city. With its ability to generate $2 million annually in adjusted EBITDA, this location also fits perfectly with our goal of acquiring profitable, cash-flowing number one locations."
The 10,000-square-foot upscale club is one of only three in Chicago and the only one with a full liquor license. It has grandfathered use and has been one of the top venues of its kind in the Midwest since 1993. Open until 4 AM Sunday through Friday nights and 5 AM on Saturday nights, the club is near Chicago's chic Lincoln Park neighborhood and minutes away from the city's renowned North Michigan Avenue and Gold Coast.
Consideration for the club was $2.0 million in cash and $4.5 million in 7.00%, 6-year, fully amortizing seller financing. Consideration for the real estate, which consists of the building and land, was $4.0 million in cash. The cash portion of the transactions was funded through available cash, which includes cash from operations, proceeds from a $5.0 million unsecured bank term loan, and third-party debt financing, as previously announced.
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
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, 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, 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 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.
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