RICK - RCI Hospitality Holdings (RICK) - Another Club Acquisition
Acquisition. Last Friday, RCI announced closing on purchase agreements that will enable the Company to open a third adult nightclub in the Odessa, TX area. The new club will be RCI's third in the area, complimenting the existing Rick's Cabaret Odessa and Jaguar's Club Odessa. To be called PT's Showclub, the new location will offer adult entertainment and liquor service and is expected to appeal to a different demographic from the existing clubs.Details. RCI paid $1.8 million in cash and seller financing for the club's assets, including all necessary licenses, and for the 5,180 square foot building and one acre property. The property was the former home of a couple of other adult nightclubs. Although financial details were not provided outside of the acquisition cost, other properties in the area are listed in the $70-$80 per sq/ft range, according to LoopNet, suggesting a potential cost of the property in the $400,000 range, leaving $1.4 million for the business. At management's normal 3-5x EBITDA acquisition target, this would suggest expected annual EBITDA contribution in the $400,000 range. The club should begin contributing to results by the end of September. Read More >>