By Robb M. Stewart
RCI Hospitality Holdings Inc.’s shares jumped Monday after the owner of gentlemen’s clubs and sports bars moved to buy 11 adult nightclubs in six states, real estate and trademarks and other intellectual property for $88 million.
In morning trading, the shares were 17% higher at $68.50, extending the gains since the end of last year to 74%.
RCI said the deal includes nine nightclubs controlled by entrepreneur Troy Lowrie of Lakewood, Colo., and six related real-estate properties plus associated intellectual property such as websites, internet domain names and copyrights. All the establishments are fully open and will expand the company’s geographic footprint.
The deal will be funded through a $26 million payment of cash and $30 million in restricted stock, valued at $60 a share, as well as $21.2 million in seller financing at 6% and $10.8 million in commercial real estate bank financing at 5.25%, it said.
The acquisition is collectively RCI’s largest since its 1995 founding and the company said it expects it to be accretive in its first year.
Write to Robb M. Stewart at robb.stewart@wsj.com
