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Kirkland-Led Catterton Pays $925M For Spa Co. Steiner Leisure

Private equity firm Catterton, advised by Kirkland & Ellis LLP, has inked a $925 million deal to acquire spa services and products provider Steiner Leisure Ltd. and take the company private, Catterton said Friday.

Catterton agreed to pay $65 per share, a 15 percent premium over Steiner’s Thursday closing price, in a transaction that values the company at $925 million including debt. Steiner, which reported 12,830,601 common shares outstanding as of Aug. 3, will be delisted from Nasdaq if the deal goes through as planned, a spokesperson for Catterton told Law360.

"We are pleased to make this investment in Steiner Leisure, which has an attractive portfolio of distinguished beauty and wellness brands and services,” Catterton Managing Partner J. Michael Chu said in a Friday statement. “We are excited about the company's future and look forward to leveraging our retail and consumer expertise and network to help Steiner Leisure enhance its position as an industry leader.”

The deal provides a “go-shop” period until Oct. 6 for Steiner to solicit alternative buyout proposals, Catterton said.

Steiner shares surged on the news of the agreement, trading around $64.7 late Friday morning.

In addition to operating spas on cruise ships and in hotels, Steiner sells beauty products under brand names including Elemis, La Thérapie, BlissLabs and Remède, according to a report filed in February with the U.S. Securities and Exchange Commission.

The company took in about $863.5 million in revenue in 2014, of which about 69 percent came from its service businesses. It turned a $186.1 million gross profit for 2014, according to the SEC filing.

Steiner provides spa services to cruise lines, including Carnival Cruise Line, Holland America Line, Royal Caribbean Cruises and Norwegian Cruise Lines, and to hotel companies, including Marriott Hotels, Westin Hotels and Resorts and Wyndham Hotels and Resorts, it said in its SEC report. Of the 7,027 employees working for Steiner as of February, 4,467 were in spa operations.

The company also said it operates 12 massage and beauty schools and 110 retail centers for Ideal Image Development Inc., a laser hair-removal business it acquired in 2011 for $175 million.

Steiner CEO Leonard Fluxman said in a Friday statement that Catterton has a “proven track record” of helping retail and consumer-focused companies grow.

“This transaction will provide Steiner Leisure with greater flexibility to focus on our long-term business initiatives and to improve our role as a global provider and innovator in beauty, wellness and education,” Fluxman said. “Catterton's partnership is an important endorsement of our brands and the hard work and commitment of our team.”

Catterton currently holds investments in companies ranging from Edible Arrangements International LLC to online used car sales platform Vroom, according to its website.

Steiner said the deal had been unanimously approved by its board of directors. The transaction is expected to close in the fourth quarter of 2015 or early 2016, assuming it is approved by regulators and Steiner shareholders.

Catterton is represented by a Kirkland & Ellis LLP team including Eunu Chun, William Sorabella, Joshua Kogan, John Kupiec, Ryan Brissette and Daniel Tavakoli.

A special committee of Steiner's board is represented by a Dechert LLP team including Carmen Romano,  Derek Winokur, Jon Stott, Ruslan Koretski, Cody Cowper and Sarah Gelb.