Rick's Cabaret International, Inc. Agrees To Purchase Controlling Interest In Adult Nightclub Near Downtown Omaha
Rick's Cabaret Subsidiary Also Agrees to Buy Sarie's Lounge Building
HOUSTON - (June 2, 2011) – Subsidiaries ofRick's Cabaret International, Inc. [NASDAQ-GM:RICK],the nation's leading group of upscale gentlemen's clubs, has signed an asset purchase agreement that will give it controlling ownership of an adult nightclub just east of downtown Omaha. A subsidiary of Rick's Cabaret also has agreed to purchase the building where the club is located.
Under terms of the agreed transaction Rick's Cabaret will pay $425,000 in cash to the current owners of Sarie's Lounge at 2449 N. 13th Street in Carter Lake. The current owners of Sarie's Lounge will hold a 40 percent interest in a new subsidiary formed to operate the club. Rick's Cabaret will receive a 10 percent royalty on gross revenues for the use of the Rick's Cabaret name by the new subsidiary and Rick's Cabaret will also be entitled to 60 percent of profits while the minority shareholders will earn the remaining 40 percent.
Under terms of a separate purchase agreement Rick's Cabaret subsidiary RCI Holdings, Inc. has agreed to pay $1,275,000 for the building that houses the current Sarie's Lounge. RCI Holdings will lease the property back to the new owners.
Rick's Cabaret has also agreed to loan the enterprise up to $500,000 to be used for remodeling, capital improvements, advertising, promotion, marketing and other operating expenses, if necessary.
"This acquisition extends our footprint in the Midwest, with a terrific location near the heart of Omaha," said Rick's Cabaret president and CEO Eric Langan. "After renovations have been completed we will rebrand the club as a Rick's Cabaret, bringing our traditionally fine, first-class entertainment experience to this vibrant market."
Closing of the transactions is expected before the end of June, subject to conditions consistent with acquisitions of this type, plus closing on the associated real property purchase.
About Rick’s Cabaret:
Rick's Cabaret International, Inc. (NASDAQ: RICK) is home to 23 upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Miami, Philadelphia, Charlotte, Dallas, Houston, Minneapolis and other cities operate under the names "Rick's Cabaret," "XTC," "Club Onyx" and "Tootsie's Cabaret". Sexual contact is not permitted at these locations. Rick's Cabaret also operates a media division, ED Publications, and owns the adult Internet membership Website couplestouch.com as well as a network of online adult auction sites under the flagship URL naughtybids.com. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact [email protected] or visit www.ricksinvestor.com.
This document contains 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 document, 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 the operational and financial results of our Web sites, 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. Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements are described in forms filed with the SEC from time to time and available at www.ricksinvestor.com or on the SEC's internet website at www.sec.gov. Rick's has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. For further information visit www.ricksinvestor.com.
Contact: Allan Priaulx, 212-338-0050, [email protected]