CD&R in $3bn instant IPO

The New York buyout firm today announced a substantial minority investment in the beauty-supplies division of publicly traded Alberto-Culver Company. The new company will be spun out as a public company listed on the New York Stock Exchange.

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.