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Cortiva sells to Steiner
| Steiner Leisure Limited Announces Entry Into an Agreement for the Acquisition of the Assets of Cortiva Group, Inc. |  |
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Thursday, 13 October 2011 16:35
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| Steiner Leisure Limited has entered into an agreement for the acquisition of the assets of Cortiva Group, Inc. ("Cortiva"). Cortiva operates seven post-secondary massage therapy schools with a total of 12 campuses located in Arizona, Florida, Illinois, Massachusetts, New Jersey, Pennsylvania and Washington and which had revenues in 2010 of approximately $24.6 million. Post-closing, Steiner, through its Schools division, would own and operate a total of 30 campuses in 14 states with an anticipated total population of approximately 5,200 students. This transaction, which is expected to be accretive to earnings post integration and neutral to slightly accretive to earnings in 2012, has a purchase price of $33.0 million in cash. Prior to closing, we will determine the extent to which the purchase price will be paid from existing cash and/or through borrowings under our credit facility. Leonard Fluxman, President and Chief Executive Officer of Steiner, said, "The acquisition of Cortiva Institute, a well-known participant in the massage therapy education field and one of our longtime competitors, would considerably expand and fortify the presence of our Schools division in the post-secondary massage therapy school market. The integration of Cortiva's extensive massage therapy offerings into our existing curriculum, as well as the availability of a variety of new campus locations in several regions of the United States new to us, would further assist the growth of our Schools division. We look forward to introducing even more graduates, with increasingly diverse skill sets, into the growing massage therapy and spa industries." Closing of the transaction, which is anticipated to take place in 2011, is subject to conditions similar to those in other transactions of this type including, among others, the receipt of regulatory approval from the Department of Education (the Cortiva schools are eligible to receive Title IV student loan funding). Steiner Leisure Limited is a worldwide provider of spa services. The Company's operations include shipboard and land-based spas and salons. We provide our services on 155 cruise ships and at 68 land-based spas. Our land-based spas include resort spas, urban hotel spas and day spas and are operated under our Elemis(R), Mandara(R), Chavana(R), Bliss(R) and Remede(R) brands. In addition, a total of 28 resort and hotel spas are operated under our brands by third parties pursuant to license agreements with the Company. Our cruise line and land-based resort customers include Azamara Club Cruises, Caesar's Entertainment, Carnival Cruise Lines, Celebrity Cruises, Crystal Cruises, Cunard Cruise Line, Hilton Hotels, Holland America Line, InterContinental Hotels and Resorts, Kerzner International, Loews Hotels, Marriott Hotels, Nikko Hotels, Norwegian Cruise Line, P&O Cruises, Planet Hollywood, Princess Cruises, Royal Caribbean Cruises, Seabourn Cruise Lines, Silversea Cruises, Sofitel Luxury Hotels, St. Regis Hotels, Thomson Cruises, W Hotels and Resorts, Westin Hotels and Resorts and Windstar Cruises. Our award-winning Elemis, Bliss and Remède brands are used and sold in our cruise ship and/or land-based spas and are also distributed worldwide to exclusive hotels, salons, health clubs, department stores and destination spas. Our products are also available at www.timetospa.com and www.blissworld.com . Steiner Leisure also owns and operates five post secondary schools (comprised of a total of 18 campuses) located in Miami, Orlando, Pompano Beach and Sarasota, Florida; Baltimore, Maryland; Charlottesville, Virginia; York, Pennsylvania; Salt Lake City and Lindon, Utah; Las Vegas, Nevada; Tempe and Phoenix, Arizona; Westminster and Aurora, Colorado; Groton, Newington and Westport, Connecticut; and Dallas, Texas. Offering programs in massage therapy and, in some cases, skin care, these schools train and qualify spa professionals for health and beauty positions within the Steiner family of companies or other industry entities. |
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Replies to This Discussion
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Permalink Reply by Emmanuel Bistas on
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I wonder why "asset acquisition" instead of "stock acquisition".
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Permalink Reply by Relax & Rejuvenate on
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Private companies may have stock, but since they are not traded on the open market, there is no publicly known value to the shares. You buy the assets and let the private shareholders figure out how to divide the proceeds.
Also, buying the assets means you are not buying the liabilities, so there might be some debt that is left for the Cortiva owners to settle on their own.
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Thank you!
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Permalink Reply by Alexei Levine on
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The cartel consolidates their position. Occupy Massage Therapy! :)
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Any particular reason why you see this as a bad thing?
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Permalink Reply by Daniel Cohen on
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Yes, from what I have seen in California, growth of chain schools has forced out of business many small individual schools. These schools taught from experience and offered many advanced classes in various modalities taught by MTs experienced in the modality in the area. The loss of these small schools has made it difficult to find advanced classes in our area. The chain schools tend to teach lengthy and costly core curriculum with a few advanced classes sponsored by manufacturers and chain spas to boost their own business.
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It tends to raise the cost of entry into the profession as the large chain schools push the smaller independent schools out of business. It also concentrates wealth in the hands of a few corporate shareholders rather than spreading it out amongst more people in our society. The large chain schools advocate for legislation that raises the entry level criteria unnecessarily as the longer a program is the more profit they can make. Corporate for-profit schools are also becoming famous for predatory recruitment tactics that result in outsize student loan debt for their graduates, and students who might not be a good fit for the field of massage therapy.
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Amen
Alexei Levine said:
It tends to raise the cost of entry into the profession as the large chain schools push the smaller independent schools out of business. It also concentrates wealth in the hands of a few corporate shareholders rather than spreading it out amongst more people in our society. The large chain schools advocate for legislation that raises the entry level criteria unnecessarily as the longer a program is the more profit they can make. Corporate for-profit schools are also becoming famous for predatory recruitment tactics that result in outsize student loan debt for their graduates, and students who might not be a good fit for the field of massage therapy.
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I think the market sorts things out eventually, as long as it's allowed to do that. The issues arise when big entities start exerting influence on politicians through lobbying and raise artificial barriers for the little guys (or when the government starts messing with the marketplace as when it offers pell grants and guarantees loans for vocational programs).
Personally I look forward to having Steiner down the street from us. Having Cortiva in the neighborhood was really great.
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Ha, I know what you mean Emmanuel.
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Whatever the level of politics and the level of abuse of power, as an organization grows the freedom of those within decreases.
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Permalink Reply by Vlad on
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I always regarded Steiner as the cruise therapist trainer. And I'd regarded Cortiva as one of the best schools for all round training, and they put some emphasis on research literacy and encouraging students to get involved with research. I hope they don't let that slip as a result of this.
I'd be interested in how much operations change, curricula changes and what changes there are in the staffing of the Cortiva schools 6 months down the road.
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