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Rick’s Cabaret Raises $7.2M to Expand Operations

Rick’s Cabaret Raises $7.2M to Expand Operations
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Aug 7, 2009 7:00 AM PDT    Text size: 
HOUSTON — Rick's Cabaret International Inc. said Thursday it raised $7.2 million through convertible debentures that will be used to make future acquisitions.

Eric Langan, president and CEO of Rick's Cabaret, said the company is “well-positioned” to expand after “waiting for the economy to show signs of improvement.”

"We already have several targets of interest, but we want to talk with other possible acquisition candidates at the Gentlemen's Club Owners Expo in Las Vegas, which is attended by most club owners," Langan said.

That convention is slated for Aug. 23-26 at the Mandalay Bay hotel.

Langan said that last year, Rick’s Cabaret acquired five nightclubs and the remaining 49 percent of one other location.

"We are starting to see improvements in several of the markets we operate in and hope to see this continue in the next few quarters," Langan said.

The three-year debentures bear interest at 10 percent per annum and can be converted into shares of Rick's common stock at $8.75 per share.

A debenture, also called a note, is a certificate issued by a company acknowledging that it has borrowed money where interest is being paid.

The Rick's Cabaret debentures are redeemable by the company after six months from issuance if the closing price of Rick's stock is at least $11.50 for 20 consecutive trading days.The company also issued three-year warrants exercisable at $8.75 that can be called by Rick's Cabaret if shares trade for 20 consecutive trading days at $12.25.

A public company that trades on the Nasdaq, Rick's Cabaret owns, operates or licenses adult nightclubs in New York, Miami, Philadelphia, Las Vegas, New Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities under the names Rick's Cabaret, XTC, Club Onyx and Tootsie's Cabaret.

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