NEW YORK, N.Y. and TORONTO, ONT., June 21, 2004 – Falconhead Capital, of New York, a private equity investment firm specializing in leisure-, lifestyle-, media- and sports-related businesses, today announced that it has acquired a majority stake in Premier Salons, of Toronto, Canada. The operations of Stonewater Spas, an existing Falconhead portfolio company, will be merged with Premier in a transaction with a combined enterprise value of more than $100 million.
Premier Salons is one of the largest privately-owned salon and spa chains in North America, operating more than 400 mostly upscale locations with approximately 4,000 employees, including salon staff, in 32 U.S. states and nine Canadian provinces. Stonewater Spas currently has 20 standalone, luxury day spa and salon locations in 13 metropolitan markets across the United States. The combination of Premier and Stonewater will establish the combined enterprise, which will be known as Premier, as one of the largest independent upscale spa and salon companies in North America, with combined revenues of more than $125 million.
David Moross, Chairman and Chief Executive Officer of Falconhead Capital, said: “This exciting transaction is the culmination of our efforts over the past two plus years to create a major spa and salon platform that we could build into North America’s leading independent spa and salon company. As one of the only upscale operators of size in North America, Premier will have a significant presence in the highly fragmented, rapidly growing, $53 billion North American spa and salon industry, many opportunities for further growth both organically and through acquisition, and an outstanding leadership team headed by Premier founder and CEO Brian Luborsky. In addition, Falconhead’s strategic relationship with IMG will enable us to leverage IMG’s athletes, models and fashion events to create the first premium spa and salon brand spanning the United States, as well as all of Canada.”
Brian Luborsky, who founded Premier in 1984 and who will continue to serve as CEO, will own substantially all of the balance of the equity of the combined enterprise not owned by Falconhead and provide seller financing. Premier will be led by the current Premier senior management team and continue to be headquartered in Toronto. Mr. Luborsky said: “I’m delighted to partner with David Moross and his colleagues at Falconhead, who share our vision of establishing the new Premier as the leading North American spa and salon company and brand. I also look forward to welcoming the outstanding managers and over 1,000 professional staff of Stonewater Spas into our organization. The shared commitment of the Premier and Stonewater managers and professionals to outstanding customer service, the complementary customer bases of our two organizations, and the economies of scale and branding opportunities this deal will make possible, make the merger of Premier and Stonewater a big win for everyone concerned.”
According to industry data, Americans today spend an average of $200 per person per year on hair care and nail care in salons. There are currently more than 9,000 day spas in the United States and 1,300 in Canada, and the number of day spas has grown an average of 20 percent annually for the past eight years.
CapitalSource Finance LLC has provided a senior debt facility in connection with the transaction and has coinvested in the transaction alongside Falconhead. CapitalSource Inc. is a specialized commercial finance company offering asset-based, senior, cash flow and mezzanine financing to small and mid-sized borrowers through three focused lending groups: Corporate Finance, Healthcare Finance and Structured Finance.
Falconhead Capital LLC (www.falconheadcapital.com), whose principal fund is Sports Capital Partners, L.P., is a private equity investment firm established in 1998 to provide investors with significant long-term capital appreciation by investing globally in leisure-, lifestyle-, media- and sports-related businesses. The firm's investment partners include the California Public Employees' Retirement System (CalPERS), the nation’s largest public pension fund, which has committed to invest a minimum of $122 million in Falconhead funds. Falconhead’s investment strategy is also backed by its strategic partner, IMG, the world's largest sports marketing and management firm. Falconhead is headquartered at 527 Madison Avenue, 10th Floor, New York, NY 10022; telephone: 212-634-3304.
Roy Winnick or Mark Semer
Kekst and Company
212-521-4842 or 4802
905-470-7850 ext. 244