Steiner Leisure Limited Agrees to Acquire Ideal Image and Obtains Related Financing
NASSAU, The Bahamas, Oct. 17, 2011 -- Steiner Leisure Limited (Nasdaq:STNR), today announced that it has entered into an agreement for the acquisition of all of the issued and outstanding capital stock of Ideal Image Development, Inc. ("Ideal Image"). Ideal Image is a leader in the important and growing consumer healthcare category of laser hair removal. The company has provided more than two million treatments since 2001 and is uniquely positioned as the only national provider focused exclusively on laser hair removal. Ideal Image has a nationwide network of 68 treatment centers (17 are operated by franchisees) across 21 states, delivering a branded medical experience in a convenient upscale retail setting. The two current Co-CEOs of Ideal Image have agreed to continue in those roles after the closing of the transaction.
This transaction, which is expected to be $0.20 to $0.25 accretive to earnings for 2012 and has a purchase price of $175 million payable in cash at closing, and will be paid from existing cash and through borrowings under the new credit facility described below.
Closing of the transaction, which is anticipated to take place in November 2011, is subject to conditions similar to those in other transactions of this type, including, among others, regulatory approval. Absent satisfaction of certain conditions to close, each party may terminate this transaction. In the event of a termination of the agreement by a party other than as permitted by the agreement, a break-up fee of $8.75 million would be payable by such party.
Leonard Fluxman, President and Chief Executive Officer of Steiner Leisure, said, "Ideal Image has been a leader in the growing industry of laser hair removal, providing customized treatments by highly trained, experienced practitioners to its clients for over a decade. Laser hair removal represents an approximately $2.1 billion market and is experiencing rapid growth supported by positive demographic, cultural and lifestyle trends. The effective and convenient results offered by Ideal Image complement our philosophy of enhancing the quality of life of our guests by providing a range of beauty and body treatments of the highest caliber in our facilities. We are very excited to have the opportunity to integrate this new field of personal care into our operations and to further diversify the array of treatment options we currently offer our clients."
In connection with this transaction, Steiner Leisure has commitments with respect to a credit facility (the "Credit Facility") with a group of lenders including SunTrust Bank, Steiner's existing lead lender, and SunTrust Robinson Humphrey, Inc., as lead arranger, which would consist of a $60 million revolving credit facility and a new delayed draw term loan facility of $165 million, both of which would mature five years following the initial closing of the Credit Facility. The availability of the delayed draw term loan would be subject to certain conditions customary for transactions of this nature and would be expected to be fully funded at the closing of the acquisition. If the delayed draw does not occur by December 31, 2011, the term loan facility will be cancelled. The Credit Facility would amend and restate Steiner's 2010 credit facility.
Steiner Leisure Limited is a worldwide provider and innovator in the fields of beauty, wellness and education. We are dedicated to maintaining the highest quality standards and continually evolving to include and anticipate new developments within our industry. We aim to maintain and expand our existing diverse portfolio of services, products and brands, as well as to seek out new opportunities to complement our business.
Our services include traditional and alternative massage, body and skin treatment options, fitness, acupuncture, herbal medicine and medi-spa treatments. We are committed to providing our customers with a wide-ranging assortment of beauty products, including premium quality options developed by us under our own brands, as well as those purchased from third parties.
Our distribution channels include our shipboard and land-based spas and salons, destination spas, health clubs, department stores and third party retail outlets and distributors. We also sell our products on certain British Airways flights, on QVC, by catalog, and online through our websites, including www.timetospa.com and www.blissworld.com. ;
Our post secondary schools offer programs in massage therapy and skin care, among others, and, along with our recruiting and training operations, prepare spa professionals for careers in the health and wellness industry, including within the Steiner family of companies.
Our cruise line operations are conducted in spas onboard 155 ships, including Azamara Club Cruises, Carnival Cruise Lines, Celebrity Cruises, Crystal Cruises, Cunard Cruise Line, Holland America Line, Norwegian Cruise Line, P&O Cruises, Princess Cruises, Royal Caribbean Cruises, Seabourn Cruise Lines, Silversea Cruises, Thomson Cruises and Windstar Cruises.
Our land-based spa operations are carried out under our Elemis®, Mandara®, Chavana®, Bliss® and Remede® brands and take place in 68 locations, including resort spas, urban hotel spas and day spas. In addition, a total of 28 resort and hotel spas are operated under our brands by third parties pursuant to license agreements with the company. Our land-based customers include Caesar's Entertainment, Hilton Hotels, InterContinental Hotels and Resorts, Kerzner International, Loews Hotels, Marriott Hotels, Nikko Hotels, Planet Hollywood, Sofitel Luxury Hotels, St. Regis Hotels, W Hotels and Resorts and Westin Hotels and Resorts.
We develop and sell a variety of high quality beauty products under our Elemis, La Thérapie™, Bliss, Remède, Laboratoire Remède® and Jou® brands.
Our schools operations consist of five post secondary schools (comprised of a total of 18 campuses) located in Miami, Orlando, Pompano Beach and Sarasota, Florida; Baltimore, Maryland; Charlottesville, Virginia; York, Pennsylvania; Salt Lake City and Lindon, Utah; Las Vegas, Nevada; Tempe and Phoenix, Arizona; Westminster and Aurora, Colorado; Groton, Newington and Westport, Connecticut; and Dallas, Texas. We have also agreed to acquire Cortiva Group, Inc., which operates seven post-secondary massage therapy schools with a total of 12 campuses located in Arizona, Florida, Illinois, Massachusetts, New Jersey, Pennsylvania and Washington. Offering programs in massage therapy and, in some cases, skin care, these schools train and qualify spa professionals for health and beauty positions within the industry, including our own operations.
As part of our employee recruitment operations for our shipboard spas, we provide education to our shipboard employees through our rigorous training programs, at our primary training facilities near London, England or one of our satellite training centers in South Africa and the Philippines. These employees are sourced primarily from the British Isles, Australia, South Africa, Southeast Asia, Canada, the Caribbean and continental Europe.
Forward Looking Statements
The reference above to the anticipated closing date of the transaction described in this press release may be deemed to be a "forward looking statement" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). That statement is subject to risks and uncertainties, among other things, relating to the conditions required to be met for the closing to occur.
The reference above to the accretive nature of the transaction described in this press release also may be deemed to be such "forward looking statement." That statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These risks and uncertainties include, but are not limited to, economic conditions in the United States and other countries; our ability to integrate the newly acquired laser hair removal operations; our ability to retain key employees of Ideal Image after the closing of the transaction; the continued consumer appeal of the services offered by Ideal Image, growth in the number of Ideal Image treatment centers and competitive conditions affecting Ideal Image's services.
Undue reliance should not be placed on these forward looking statements as they speak only as of the date hereof. Additional information regarding these and other risks and uncertainties applicable to the above-referenced statements as well as our business in general is contained in our periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2010.
Subject to any continuing obligations under applicable law, we expressly disclaim any obligation to disseminate, after the date hereof, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.
CONTACT: Leonard I. Fluxman, President and Chief Executive Officer