LaBoheme is a 12,000-square-foot club located across the street from the main entrance to the Colorado Convention Center — a prime location that the company expects to pay off handsomely, according to VCG chairman and CEO Troy Lowrie.
“With this acquisition VCG Holding now has five Denver area locations, including the only two downtown locations in the city,” Lowrie said. “We expect all of our locations in Denver to have a very good year in 2008 with a number of events occurring in the city including the Democratic National Convention in August, as well as other major conventions.”
The club’s EBITDA (earnings before interest, taxes, depreciation and aAmortization) for 2007 is expected to be $1.4 million, according to VCG, a sum that company expects to increase to $1.5 million in 2008, based on the major events scheduled to take place in Denver over the coming year. VCG reportedly paid 1443 Corp, the previous owner of LaBoheme, $5.0 million for all its assets, including intellectual property.
The acquisition of LaBoheme is part of a larger strategy of “clustering club locations in major metropolitan markets,” Lowrie said.
“This technique allows key management to oversee multiple locations and gain efficiencies in our operations,” Lowrie said. “We now have five locations in both Denver and St. Louis, and we expect to expand our cluster operating model to the other cities during the next few years.”
Growth by acquisition was a major part of the company’s strategy in 2007, and will remain a big part of the company’s approach going forward, Lowrie said.
“This acquisition brings the total number of acquisitions in 2007 to 12 clubs,” Lowrie said. “Being one of a few adult entertainment consolidators, we look forward to more accretive acquisitions in 2008 and beyond.”
Earlier this month, VCG announced that it was moving the listings of its common stock to the Nasdaq index.
“We elected to transfer our listing after careful consideration of the capital market alternatives, and input from institutional investors and an analysis of the electronic market model,” Lowrie said. “Nasdaq promotes innovation and attracts leading growth companies from a diverse group of sectors.”
