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Aug. 9, 2012 /PRNewswire/ --
Rick's Cabaret International, Inc. (NASDAQ:RICK), the publicly traded group of upscale gentlemen's clubs, said today its new subsidiary
Jaguars Acquisitions, Inc. (JAI) and certain other subsidiaries will acquire nine operating locations and two other licensed locations under development in a single transaction. Ten of the clubs are in
Texas and the eleventh is in
The subsidiaries will pay a total of
$26 million for the clubs and
$10 million for associated real estate, with
$4.35 million to be paid in cash upon closing of the transaction and the remainder through seller notes at 9.5 percent interest payable over 12 years. The seller notes may be prepaid after five years.
The locations being purchased are the
Jaguars Clubs in
Texas plus the Jaguars Club in Phoenix. The clubs to be developed are in
Odessa and are expected to open as Rick's Cabaret locations within a few months of closing the transaction.
"This is a terrific acquisition for us and these outstanding clubs will very quickly begin contributing significantly to our earnings and cash flow with the nine currently operating clubs adding over
$15 million in gross revenues and approximately
$7 million of Adjusted EBITDA," said
Eric Langan, President and CEO of Rick's Cabaret International, Inc.
Mr. Langan said the purchase price is well within the cost parameters generally followed by the company when making acquisitions. "We believe cash flow generated by these new clubs will more than cover all debt costs and they will contribute to our overall profitability," Mr. Langan added.