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.