Regis (RGS) acquired Alline Salon Group – ASG -, its largest franchisee, in a transaction valued at $22M of initial consideration, with the ability for ASG to earn an additional $3M – $1M annually – through earn out payments over the next three years. The transaction includes 314 salon portfolio across five states, primarily Michigan, Ohio and Pennsylvania. Trailing 12 month October 2024 financial highlights: $83M in revenue, $11.1M in 4-wall EBITDA, $5.8M in EBITDA. Initial consideration represents 3.79x TTM EBITDA; total consideration including potential earn out represents 4.31x TTM EBITDA. Under the terms of the purchase agreement, Regis will acquire all of Alline’s issued and outstanding membership interests for $22M in a cash and stock transaction, of which $19M of the initial consideration was delivered in cash, in addition to shares of Regis common stock valued at $3M. The agreement also includes additional performance-based earnout opportunities of up to $3M, in $1M increments, over the next 3 years. Regis funded the $19M cash portion of the purchase price with $15M in proceeds from an upsize of Regis’ credit agreement with existing lenders, and $4M from available cash on hand. The transaction is accretive to Adjusted EBITDA.
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