RCI Hospitality acquires 821,000 shares from ADW Capital Partners for $30M

RCI Hospitality (RICK) Holdings announced the acquisition of all the shares of RCI stock owned by ADW Capital Partners, L.P. The 821,000 shares were acquired for $30M or $36.54 each for $8M in cash and $22M in two-year seller financing at 12%. The transaction closed today. The company said the transaction: Reduces its share count by about 9.5% to approximately 7,850,000 shares outstanding, Expedites its Back to Basics 5-Year Capital Allocation Plan to reduce shares to 7.5 million by fiscal year 2030, and Is accretive from day one to free cash flow per share based on static free cash flow for the trailing 12 months. Eric Langan, President and CEO of RCI, said: “While the price per share is above the current market, we believe our shares are significantly undervalued. As such, this agreement represents a rare opportunity to significantly reduce shares on an accretive free cash flow per share basis and meets a key goal of our Capital Allocation Plan in a single transaction.” The transaction was approved by RCI’s board of directors after receiving a fairness opinion from a third party business advisory firm that the purchase price was fair from a financial point of view to shareholders.