CD&R Exits Sally Beauty with $1.9 Bln in Proceeds

Clayton, Dubilier & Rice said Monday that it received $1.9 billion in total proceeds from its 2006 investment in Sally Beauty Holdings. CD&R invested $571 million when it acquired a roughly 47.5% holding in Sally Beauty in 2006. CD&R’s investment was made during a leveraged spinoff from Alberto-Culver. Since last October, the PE firm has sold all of its 86 million shares in four secondary offeringsand a share repurchase by Sally in May 2012.


Clayton, Dubilier & Rice (together with its affiliates, “CD&R”) today announced total proceeds of $1.9 billion from its 2006 investment in Sally Beauty Holdings, Inc. (NYSE: SBH) (“Sally”). Including a secondary offering completed today, CD&R affiliated funds sold all of their 86 million Sally common shares in four underwritten offerings in October 2011, February 2012, May 2012 and July 2012, and a share repurchase by Sally in May 2012, at an average price of $22.68.
Under CD&R’s ownership, revenues and EBITDA for Sally increased 49% and 101%, respectively, while margins expanded 430 basis points. Sally pursued a number of initiatives to drive earnings growth, including initiatives focused on improving sales productivity at the Company’s 4,400-store network, accelerating new store openings, augmenting profitability, growing internationally, and strategically making acquisitions.
In November 2006, CD&R invested $571 million to acquire approximately 47.5% of Sally Beauty Holdings, Inc., valued at $6.66 per share, from The Alberto-Culver Company in an innovative leveraged spin-off transaction. All remaining shares were spun off to then-current Alberto-Culver shareholders. Post-initial investment, CD&R became the largest single shareholder. CD&R Partners Richard J. Schnall and Kenneth A. Giuriceo served as Directors of Sally Beauty, and CD&R Operating Partner James G. Berges served as Chairman.
“Sally Beauty involved the complex carve-out of a non-core distribution business,” said Mr. Schnall. “The company’s strong performance during our ownership was underpinned by solid execution of key operational improvement initiatives, including increasing customer traffic, expanding gross margins and growing the business internationally.”
Mr. Giuriceo added: “We are very proud of our association with Sally Beauty and wish the very talented management team continued success as it continues to drive earnings through a combination of top line growth and efficiency initiatives.”
About Clayton, Dubilier & Rice
Founded in 1978, Clayton, Dubilier & Rice is a private equity firm with an investment strategy predicated on producing financial returns through building stronger, more profitable businesses. The Firm’s partners and advisors include a combination of skilled investment decision-makers and seasoned corporate leaders from major global enterprises. Since inception, CD&R has managed the investment of approximately $17 billion in 52 businesses – mostly subsidiaries or divisions of large corporations – with an aggregate transaction value of over $80 billion. The Firm has offices in New York and London. For more information, please visit
About Sally Beauty Holdings, Inc.
Sally Beauty Holdings, Inc. is an international specialty retailer and distributor of professional beauty supplies with annual revenues of $3.5 billion. Sally operates primarily through two business units, Sally Beauty Supply and Beauty Systems Group (BSG), and is the largest distributor of professional beauty supplies in the U.S. based on store count. The Sally Beauty Supply and Beauty Systems Group businesses sell and distribute through over 4,400 stores, including 185 franchised units, throughout the United States and Puerto Rico, the United Kingdom, Belgium, Canada, Chile, Mexico, France, Ireland, Spain, Germany and the Netherlands.

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