August 09, 2007 05:00pm
Rick's Cabaret Signs LOI to Buy Crazy Horse Too
Source: Rick’s Cabaret International, Inc.
by: Company Press Release
(HOUSTON, TX) -- Rick’s Cabaret International, Inc. (Nasdaq: Rick), operator of upscale gentlemen’s clubs, said today it has signed a letter of intent, subject to execution of definitive documents, to acquire controlling interest in an adult nightclub in Philadelphia currently operating as Crazy Horse Too.
The 25,000 square foot club at 2908 South Columbus Blvd., decorated in fine marble and plush furnishings, opened in January 2006. It is located minutes from the major Philadelphia sports complex where Philadelphia Phillies, 76ers, Flyers and Eagles games are played and near the site of a proposed new gambling casino. Under a confidentiality clause in the letter of intent, terms of the agreement with the End Zone, Inc., which owns and operates the club are not disclosed at the present time.
"This will be a significant acquisition for us and we look forward to bringing the Rick’s Cabaret brand of upscale adult entertainment to the Philadelphia market," said Eric Langan, president and Ceo of Rick’s Cabaret. "The venue already has the feel of a fine country club, but with significant changes we are planning – including installation of a sports bar and converting part of the venue to a high-end steak house – we believe that, once acquired, it is capable of becoming one of our strongest performers in terms of revenue and profit."
Terms of the proposed transaction call for Rick’s Cabaret International, Inc. Or its subsidiary to purchase 51 percent of the outstanding stock of the End Zone, Inc., and for its subsidiary RCI Holdings, Inc., to acquire 51 percent of TEZ Management, LLC and 51 percent of TEZ Real Estate, Lp which owns the building and real property where the club is located. Upon the closing of the transaction, Rick’s Cabaret will also have a first right of refusal to acquire the remaining interest in all three entities.
Upon signing of the letter of intent Rick’s Cabaret began consulting with the current management of the Crazy Horse Too. The letter of intent is subject to the execution of a definitive agreement which will contain conditions to closing, including, but not limited to, Rick’s Cabaret obtaining adequate financing, approval by relevant regulatory authorities of the transfer of ownership in the selling corporation and other conditions consistent with transactions of this type. A closing is anticipated to take place not later than the end of 2007.
After completion of this transaction the Philadelphia club will be rebranded as a Rick’s Cabaret. This is the company’s third nightclub acquisition in the past twelve months, during which time the company has acquired venues in Ft. Worth and Austin, Texas and also signed a licensing agreement with an operator in Buenos Aires, Argentina.