Growth on the agenda as Regis ups stake in salon business
Under the terms of the agreement, Regis will pay approximately $56.0m (€40.6m) to secure an additional 17 per cent ownership interest, bringing its total equity position in Provalliance to 46 per cent.
"We are extremely excited to expand our ownership interest in Provalliance," commented Paul D. Finkelstein, CEO of Regis.
‘Proven business model’
"We originally partnered with Franck Provost in January, 2008 and we are very satisfied with the execution of the business plan we jointly developed. The Provalliance business model is proven and the management team is established and experienced,” Finkelstein said.
Regis manufactures professional hair care products for the industry, and Finkelstein also said he felt Provalliance’s brand recognition and profitability has been enhanced through its strong partnerships with global professional product companies.
Provalliance, which operates salons primarily under the brands of Jean Louis David, Franck Provost and Saint Algue, currently owns or franchises approximately 2,500 hair salons in 33 countries with annual revenues of over $275m (€200m) and system-wide sales exceeding $1bn (€725m).
"With only a four-percent market share in North America, Regis remains committed to growing our business domestically. However, there are also significant expansion opportunities internationally, and we do not want to miss out on those opportunities,” said Finkelstein.
Platform for international growth
“By increasing our ownership in Provalliance, we have the platform to participate in international growth, thereby further solidifying our position as the world's largest operator of hair salons," he concluded.
The news comes after Regis recently announced that its Board of Directors had declared a regular quarterly dividend of six cents a share, an increase of 50 per cent over the previous quarter’s dividend.
The company explained that the dividend increase reflects the ongoing confidence of management and the Board of Directors in Regis' financial strength and future prospects.
According to the professional hair care supplier, it is committed to enhancing shareholder value and will consider additional increases to its dividend in future quarters.
