A subsidiary of RCI Hospitality Holdings, Inc. has signed a definitive agreement to acquire all of the issued and outstanding shares of common stock of the company that owns VIP’s Gentlemen’s Club in Chicago for $6.5 million. RCI also announced a definitive agreement for a subsidiary to acquire the club’s real estate for $4.0 million.
VIP’s is one of only three gentlemen’s clubs in Chicago, and the only one with a grandfathered full liquor license. The upscale, 10,000-square-foot club opened in 1993 in Chicago’s Near North Side neighborhood, in the Clybourn Corridor.
“We’re excited about VIP’s joining our portfolio of high-quality clubs in top 20 metropolitan markets,” said Eric Langan, president and CEO of RCI. “VIP’s fits perfectly in line with our goal of acquiring profitable, cash-flowing, number one locations. With its ability to generate $2 million annually in Adjusted EBITDA, the acquisition also fits our capital allocation strategy in terms of valuation and cash-on-cash return.”
Under the terms of the agreement, consideration for the club is $2 million in cash and $4.5 million in seller financing. Consideration for the real estate, which is unencumbered and consists of VIP’s building and land at 1531 N. Kingsbury Sreet, is $4 million in cash. Closing is subject to transfer of all necessary permits, licenses and other authorizations, and usual closing conditions for transactions of this kind, including due diligence.
