Rick's Cabaret enters publishing industry
Rick's Cabaret International Inc. has acquired ED Publications Inc., adding three industry trade publications, two trade shows and more than 25 Web sites to its holdings.
The purchase, which includes the trade magazines Exotic Dancer, Teeze and Adult Store Buyer, sets the foundation for Rick's new media division, RCI Entertainment Media Holdings Inc. Rick's paid $1.2 million for ED, with the possibility of up to $2 million in additional earn-out based on certain performance benchmarks.
“We're in a very aggressive expansion program, and we're helping to consolidate this industry,” said Allan Priaulx, corporate communications and investor relations officer for Rick's. “So when the opportunity came along to buy the leading group of trade magazines and the leading trade conference in the industry, we explored it very seriously.”
Rick's is now exploring franchise extensions for ED, which could include consumer-oriented magazines distributed at Rick's locations. Priaulx added that Rick's will continue its club acquisitions but has been looking to expand into other industries. City ordinances, he noted, are restricting the building of new clubs.
Exotic Dancer currently serves North America's 3,800 adult nightclubs; Adult Store Buyer boasts more than 12,000 readers in the erotic toy and video store industry, and Teeze is distributed to owners and operators of more than 7,500 lingerie retailers.
ED Publications Inc. also produces the national conventions Gentleman's Club Owners Expo and StorErotica. The company's Web presence extends across multiple sites.
Combined annual revenue for ED and Teeze/ASB tops $2 million. Rick's annual revenues for 2007 were $32 million, and the company has projected sales of $55 million in 2008.
Executives at Rick's cited ED's steady cash flow and the possibility of building new relationships with product suppliers and advertisers as key selling points.
Priaulx said no lay-offs would occur from the acquisition, and that integration between the two companies should run smoothly. Don Waitt, owner of ED and a principal for the Teeze/ASB group, will serve as president of RCI Entertainment Media Holdings under a three-year agreement.