Clayton, Dubilier & Rice today announced an agreement to buy a 47.5 percent equity interest in Sally Beauty Company, a division of publicly traded Alberto-Culver Company.
Alberto-Culver, a consumer products conglomerate, will retain a 52.5 percent interest in Sally Beauty, which will be listed as a separate company on the New York Stock Exchange.
Sally Beauty, based in Denton, Texas, distributes a marketer and distributor of professional beauty supplies with 3,290 stores.
The transaction includes $575 million in equity from New York-based Clayton Dubilier and $1.85 billion in debt from Merrill Lynch.
Clayton Dubilier has a long history of investing in multi-location and distribution companies. The deal, several years in the making, was led by Clayton Dubilier partner Richard Schnall.
Clayton Dubilier will appoint a chairman of the spun-out company as well as appoint 6 of 12 directors.
The deal is expected to close in the fourth quarter.