RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today announced that a subsidiary has signed a definitive agreement to acquire all of the issued and outstanding shares of common stock of the company that owns VIP's Gentlemen's Club in Chicago for $6.5 million. RCI also announced a definitive agreement for a subsidiary to acquire the club's real estate for $4.0 million.
VIP's is one of only three gentlemen's clubs in Chicago, is the only one with a full liquor license, and has grandfathered use. The 10,000-square-foot upscale club has been one of the top in the Midwest since opening in 1993. Open until 4 AM Sunday through Friday nights and 5 AM on Saturday nights, VIP's is located near Chicago's chic Lincoln Park neighborhood and is only minutes away from Chicago's renowned North Michigan Avenue and Gold Coast.
"We're excited about VIP's joining our portfolio of high-quality clubs in top 20 metropolitan markets," said Eric Langan, President & CEO of RCI. "VIP's fits perfectly in line with our goal of acquiring profitable, cash-flowing number one locations. With its ability to generate $2 million annually in Adjusted EBITDA, the acquisition also fits our capital allocation strategy in terms of valuation and cash on cash return."
Under the terms of the agreement, consideration for the club is $2.0 million in cash and $4.5 million in seller financing. Consideration for the real estate, which is unencumbered and consists of VIP's building and land at 1531 N. Kingsbury St., Chicago, IL, 60642, is $4.0 million in cash. Closing is subject to transfer of all necessary permits, licenses and other authorizations, and usual closing conditions for transactions of this kind, including due diligence.
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, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, St. Louis, and other markets 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.
