Rick's Cabaret International says it has a letter of intent with Voice Media, Inc. - owners of Cybererotica - to buy www.clubpix.com, a Website Rick's says grossed $10.29 million in the eight months ending in February. Rick's said this is the second of a planned series of adult Website purchases aimed at broadening their Internet operations, with the Clubpix purchase possibly doubling Rick's Cabaret revenues.
The deal will include VMI continuing to manage and market Clubpix for a flat monthly fee. "We are confident that teaming up with Voice Media, a recognized leader in the adult Internet industry, will evidence our commitment to the growth and expansion of our internet presence," said Rick's Cabaret CEO Eric Langan. "We intend to utilize Mr. Levi's proven expertise and knowledge to bring additional credibility to our acquisition strategy among other adult Webmasters and pave the way to continue our plans to consolidate this industry.''
"I believe Rick's, as a public company, is in a unique position at this time to be a leading player in the consolidation of the adult Internet industry and in the development of its own websites to enable it to cross-market its existing premiere adult gentlemen's clubs and its existing website www.dancerdorm.com," said VMI president Ron Levy.
VMI itself is one of the heaviest hitters in the adult Internet lineup - Forbes has already recognized it as one of the largest adult Web portals, and its Cybererotica is a multiple award winner, including Best Marketing at this year's AVN Adult Internet Awards. VMI Websites now get about two million page hits a day, according to Rick's Cabaret.
The letter of intent deal involves Rick's Cabaret issuing 1.7 million restricted shares of common stock and $3,128,000 to VMI, with 700,000 shares staying in escrow until "certain earnings benchmarks" are attained, Rick's said. VMI could also pick up 300,000 more restricted shares and up to another $9 million if "certain other earnings benchmarks" are attained, Rick's continued.
Those benchmarks are Clubpix earning $4 million or better in the year following the closing of the deal, and $6 million or better in the same period, respectively.
This isn't the first time Rick's Cabaret and VMI have done such business together - Rick's recently went into a letter of intent with VMI to buy www.xxxpassword.com, and also has a management and marketing deal with VMI to run, sell, and distribute DancerDorm.com.
