NEW YORK, Aug. 20, 2012 /PRNewswire/ -- Rick's Cabaret International, Inc. (NASDAQ:RICK), the publicly traded group of upscale gentlemen's clubs, has agreed to acquire a second adult business in midtown New York City. The company plans to create a new gentlemen's club on the midtown Manhattan site near Times Square.
Rick's Cabaret said it will pay $3 million for the business, currently operating as an adult book and novelty store. The transaction calls for a payment of $1.5 million in cash and $1.5 million in six percent promissory notes that are convertible into shares of Rick's Cabaret common stock at a conversion price of $10.25. The company will also enter into a new 20-year lease for the building at the closing of the transaction.
"It is virtually impossible to find an appropriate location for an adult club in midtown Manhattan, so we are very fortunate that we have secured this rare site," said Eric Langan, President and CEO of Rick's Cabaret, which currently operates 24 clubs around the country. "It is close to Times Square, numerous hotels and businesses, and is ideal for the kind of upscale club we operate," he added, noting that the exact location of the new club will be disclosed in due course. The new club is expected to open in about a year, after renovation of the building.
The Houston-based company opened Rick's Cabaret/New York in 2005 after completely remodeling a building at 50 West 33rd Street, across from the Empire State Building and down the street from Madison Square Garden and Penn Station. With a Zagat-rated steakhouse, rooftop cigar lounge and a full floor of VIP suites it is a popular spot with businessmen, celebrities, athletes and couples. Playboy.com named it the "best strip club in New York."
Closing on the transaction is subject to terms and conditions customary to a transaction of this nature.
About Rick's Cabaret: Rick's Cabaret International, Inc. (NASDAQ: RICK) is home to 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/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities as "Rick's Cabaret," "XTC," "Club Onyx" and "Tootsie's Cabaret" and other brand names. Sexual contact is not permitted at any 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. Twitter: @rickscabaret; Facebook: http://www.facebook.com/rickscabaretintl.
Forward-looking Statements: This press release may contain 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 press release, 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. 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.
SOURCE Rick's Cabaret International, Inc.