RCI Hospitality Holdings, Inc. (NasdaqGM:RICK) entered into a definitive agreement to acquire Chicas Locas in Houston from Duncan Burch, Inc. for $4 million on December 12, 2022. Consideration will be paid with $1,500,000 payable in cash by wire transfer and $2,500,000 payable by the issuance of a ten-year secured promissory note. Consideration to be paid for all five transactions totals $66.5 million, consisting of $25 million in total cash; 10-year, 7% seller financing notes totaling $25.5 million; and 200,000 restricted shares of common stock based on a per share price of $80, subject to a lock-up, leak out agreement. In a related transaction, RCI Hospitality Holdings also entered into a definitive agreement to acquire two Chicas Locas adult nightclubs and two Baby Dolls club in Dallas, Fort Worth and Arlington. EBITDA contribution of approximately $11 million is expected in the first year. Four locations are open, a fifth will reopen shortly after a full remodel, and RCI anticipates expanding operations of two of the locations. Once the remodeling and expansions are complete, EBITDA is expected to grow to $14 to $16 million annually. Closing, which is expected in January, is subject to transfer of and/or obtaining all necessary permits, licenses, and other authorizations; and other customary closing conditions for transactions of this kind.

Each of the Asset Purchase Agreements, IP Purchase Agreements, ATM Purchase Agreement and Real Estate Purchase Agreement provided that such agreements will terminate and be of no force and effect if the transactions contemplated by such agreements are not consummated on or before January 31, 2023. On January 25 and 26, 2023, the parties to those agreements entered into amendment agreements whereby this date was extended to February 28, 2023.

RCI Hospitality Holdings, Inc. (NasdaqGM:RICK) completed the acquisition of Chicas Locas in Houston from Duncan Burch, Inc. on March 16, 2023.