Rick’s Cabaret International, Inc. (NASDAQ: RICK) said today it has signed a letter of intent to purchase Centerfolds Gentleman’s Club in San Antonio.
Rick’s Cabaret said that it will pay $2.9 million for Centerfolds Gentleman’s Club plus its 18,000 square foot building and accompanying real estate. Under terms of the agreement, Rick’s Cabaret will pay the owners of the club and property $600,000 in cash at the time of purchase and will sign promissory notes for the remaining amount. The notes are not convertible into Rick's stock. A definitive agreement is expected to be signed by July 31, with closing to occur shortly thereafter, contingent upon normal due diligence and closing activities associated with purchases of this type.
Upon completion of the transaction, the club will be reopened immediately as a Rick’s Cabaret, with a full steakhouse restaurant and other amenities associated with Rick’s Cabaret establishments in New York City, Houston, Charlotte and Minneapolis.
When completed, the acquisition will be the second recent purchase by Rick’s Cabaret in the San Antonio market. On July 11, the company announced the acquisition of the former Club Exotica (4102 Naco Perrin Street), which will reopen in August as a Club Onyx. The company already operates an XTC Cabaret in San Antonio (at 2023 Sable Lane).
“San Antonio is a fast-growing market and we are delighted to be extending our presence in that city even further,” said Eric Langan, CEO of Rick’s Cabaret. “The new club should be immediately accretive to earnings and we believe that based on past history it has the potential to generate about $2 million in annual revenue.” He noted that the company does not anticipate any remodeling costs associated with the new acquisition.
The new club is located in North San Antonio at 5418 Brewster Street, directly off the I-35 artery.
