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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 Daniel Cohen on
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I don't really know why you say this. Have you researched the business practices? On what basis do you assign Evil & Goody, cost alone? It seems in Boston costs are controlled by competition. The MA regulation requires a basic 500 hour education as does California. I am curious as to why the courses mentioned exceed 700 hours which raises the entry level cost and time for MTs. Do they offer CEs or do they figure introducing major modalities within the 700 hours is sufficient? A comparison including the Anatomy offered would be interesting. I've never seen a side by side comparison of schools nor do the websites usually provide enough information to do one.
Relax & Rejuvenate said:
Let's not let any facts get in the way of pushing a misuguided opinion
Evil Corporate Player Cortiva Boston - 750 hour program, $11,400 or $15.20 per clock hour
Local do-goody school, Elizabeth Grady - 750 hour program, $11,500 or $15.21 per clock hour
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 651 hour program, $11, 070 or $17.82 per clock hour.
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 738 hour Massage & Spa program, $13,070 or $17.71 per clock hour.
Who is to blame for overpriced massage education and unsustainable student loans? Cortiva of course!
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Permalink Reply by Alexei Levine on
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Daniel,
Here's why all the schools in Massachusetts offer more than 500 hours. When the initial regulation was being drafted, the AMTA organized a coalition of all interested parties including my school, The Massage School. Together, we all agreed on a 500 hour standard. Some Shiatsu and Reflexology practitioners, among others, said they wanted to be excluded from oversight of the MA Board of Massage. They said they would fight the proposed regulations if they were included. However, unbeknownst to the rest of us, the AMTA included language in the proposed bill which would possibly allow the Board to change the minimum number of hours required for licensure. Amongst the very first actions of the nascent Board (which was dominated by school directors and owners), was to change the minimum number of hours to 650, and exclude any non-western style of massage from this core curriculum. So if you want to have some Shiatsu, Thai Massage, or Reflexology in your program, like we do, you have to add that on top of the 650 minimum curriculum.
Daniel Cohen said:I don't really know why you say this. Have you researched the business practices? On what basis do you assign Evil & Goody, cost alone? It seems in Boston costs are controlled by competition. The MA regulation requires a basic 500 hour education as does California. I am curious as to why the courses mentioned exceed 700 hours which raises the entry level cost and time for MTs. Do they offer CEs or do they figure introducing major modalities within the 700 hours is sufficient? A comparison including the Anatomy offered would be interesting. I've never seen a side by side comparison of schools nor do the websites usually provide enough information to do one.
Relax & Rejuvenate said:
Let's not let any facts get in the way of pushing a misuguided opinion
Evil Corporate Player Cortiva Boston - 750 hour program, $11,400 or $15.20 per clock hour
Local do-goody school, Elizabeth Grady - 750 hour program, $11,500 or $15.21 per clock hour
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 651 hour program, $11, 070 or $17.82 per clock hour.
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 738 hour Massage & Spa program, $13,070 or $17.71 per clock hour.
Who is to blame for overpriced massage education and unsustainable student loans? Cortiva of course!
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But as I understand the regulation Asian Bodywork does not require a license. Doesn't that mean it can be taught independently and performed for business without a massage license? Or do the regulations on schools prevent this? I am very interested in how the exclusion works and if it creates a problem for licensed massage therapists working nearby unlicensed Asian Bodyworkers.
Alexei Levine said:
Daniel,
Here's why all the schools in Massachusetts offer more than 500 hours. When the initial regulation was being drafted, the AMTA organized a coalition of all interested parties including my school, The Massage School. Together, we all agreed on a 500 hour standard. Some Shiatsu and Reflexology practitioners, among others, said they wanted to be excluded from oversight of the MA Board of Massage. They said they would fight the proposed regulations if they were included. However, unbeknownst to the rest of us, the AMTA included language in the proposed bill which would possibly allow the Board to change the minimum number of hours required for licensure. Amongst the very first actions of the nascent Board (which was dominated by school directors and owners), was to change the minimum number of hours to 650, and exclude any non-western style of massage from this core curriculum. So if you want to have some Shiatsu, Thai Massage, or Reflexology in your program, like we do, you have to add that on top of the 650 minimum curriculum.
Daniel Cohen said:I don't really know why you say this. Have you researched the business practices? On what basis do you assign Evil & Goody, cost alone? It seems in Boston costs are controlled by competition. The MA regulation requires a basic 500 hour education as does California. I am curious as to why the courses mentioned exceed 700 hours which raises the entry level cost and time for MTs. Do they offer CEs or do they figure introducing major modalities within the 700 hours is sufficient? A comparison including the Anatomy offered would be interesting. I've never seen a side by side comparison of schools nor do the websites usually provide enough information to do one.
Relax & Rejuvenate said:
Let's not let any facts get in the way of pushing a misuguided opinion
Evil Corporate Player Cortiva Boston - 750 hour program, $11,400 or $15.20 per clock hour
Local do-goody school, Elizabeth Grady - 750 hour program, $11,500 or $15.21 per clock hour
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 651 hour program, $11, 070 or $17.82 per clock hour.
Local do-goody school, located 80 miles outside of high-cost of living Boston, Central MA Massage School - 738 hour Massage & Spa program, $13,070 or $17.71 per clock hour.
Who is to blame for overpriced massage education and unsustainable student loans? Cortiva of course!
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Daniel,
Licensing requirements for Asian styles are up to individual cities and towns, so yes, if the city or town doesn't require a license they can work unlicensed (I don't know of any towns or cities that wouldn't want a license, as they seem to be using their old massage regs to regulate Asian bodyworkers, but there are a lot of towns and there may be some where people can get away with it). Schools of Asian bodywork would still have to be licensed by the state DOE. The demand for non- western massage schools has plummeted though, the last Shiatsu school in New England that I'm aware of just closed. At our school, we're about to start a 12 week course in Shiatsu just for our graduates, and it's free of charge. It's only 12 weeks because our graduates already have a comprehensive 800 hour education.
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Permalink Reply by Relax & Rejuvenate on
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Might want to review their website, where it states base tuition is $9,600, more than double the amount you cite. http://www.themassageschool.org/overview
Non-accredited education makes it difficult to obtain a license in several states. Maybe not MA -- who knows since they have yet to license schools, but probably worth the $2,000 extra to ensure your investment is appreciated elsewhere.
Just ask any MD who went to school in Grenada...
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It's my school, and we give generous scholarships out of our profits (not Taxpayer money). Currently and for the foreseeable future we are awarding all our students $5,000 scholarships, bringing their cost down to $4,600 for the full 800 hour program, plus our 12 week Shiatsu program for free. So far we have had students licensed in both Connecticut and Rhode Island, 2 states that require accreditation, as the accreditation requirement is viewed as equivelant to licensure by the state DOE. Accreditation is a ridiculous treadmill whose primary purpose in my opinion is to create jobs for accreditors, and enable schools to collect thousands of dollars in extra money from taxpayers as Pell grants. The state DOE here reports many more problems arising from accredited schools than from non-accredited schools. Hey Relax and Rejuvenate who are you? Are you connected to any school?
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Permalink Reply by Emmanuel Bistas on
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In a perfect world, all schools would be ethical and would balance their need for profitability with students’ needs. Information would be readily available and prospective students would know which schools are good and which are bad. Admissions people would truly practice admissions and would only admit those who are suitable for the profession. And prospective students would think critically and weigh the pros and cons of a massage career.
The problem is, it’s not a perfect world. Some schools do put their own needs ahead of students’ needs; information, such as licensing exam pass rates, is not available to the public; admissions people routinely mislead people to meet their sales quotas; and some (mostly younger and/or socioeconomically disadvantaged) prospective students don’t even possess basic life skills – moreover, critical thinking skills.
So, you end up with two people sitting across the table: on one side is the admissions officer with the enrollment agreement and promises of a great future, on the other the student ready to sign at the dotted line. Next to the student is the government with my and your tax dollars, guaranteeing the debt that this student will incur. Why is the government guaranteeing the debt? Because some accrediting agency said that the school conducted a self-evaluation four years ago, and peers visited the school and said that yes, the school meets the criteria of the agency.
That is where the issue starts, as Alexei correctly said, and it has nothing to do with small or large, for-profit or non-for-profit. Not-for-profits and community colleges are as bad. I met the program director of a community college once, he said he had two students in his program; that was all. Tuition was $4,000 for the nine-month program, obviously a tiny fraction of what it cost to run the program. Guess who paid the rest. The schools that work with financial aid (for profit or not) do have the incentive of pushing for more hours, for more this, more that because it adds to their bottom line. And they do cozy up to entities that can lobby on their behalf - such as when Cortiva executives paid for AMTA's cruise on the Hudson.
Access to government's pockets created Cortiva - it was not the former AmEx or oil executive founders' love for massage education. Nothing wrong with that of course, they made an investment and hopefully created some value in the market place (I think they did).
But take the government out of the table and you will see how tuition will drop (a Chicago school's tuition went up from $8,500 to $13,500 practically overnight when they started offering financial aid- the extra $5,000 was the pell grant money that the govmt paid for each student), book prices will drop, and the market will become more efficient again. People will have to pay for their school bill the old-fashioned way, and that may be easy to do because it's not going to be 15K or 20K, it will be closer to 5 or 6K (most states require between 500 and 600 hrs of training). You will also have less resentment and frustration, and people won't feel the need to go occupy places. :)
Relax & Rejuvenate said:
EVERY massage school -- whether it is run by a single MT or a corporation -- is a for-profit entity, including all of those local heros like Ben Brenneke in SEA and the owners of MTI in Boston, who sold out to Cortiva for a hefty pay day.So long as Steiner/Cortiva are saddling students with loans they can't afford, they should get into the sub-prime mortgage business and saddle them with a house they could never afford.
Personal responsibility and critical thinking are clearly dead if adults can't be responsible for making good choices with their lives, so now lets kill the corporations who took advantage of them.
Really??!?! Don't you have a street named WALL to go occupy?
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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We own and/or operate 5 spas -- 3 in NYC, 1 in SF (all in 4 star hotels) one in va. we also created the hotel inudstry's first brand wide in-room spa services program in 2005 and the industry's 2nd such program in 2007 -- currently servicing nearly 70 hotels nationwide. We also provide treatment room staffing for 6 other hotels.
BTW - Cortiva started as a provider of in-room services in NYC, but changed to education after about 18 months.
We aren't MTs, have no affiliation with a school.
If you can afford to take more than 50% off the cost of your tuition and still make a profit, wouldn't those occupying Wall St and their supporters think the list price of your tuition would be considered abusive of your students? I wish I had the kind of margins where I could discount 50%+ and still make a living!
Alexei Levine said:It's my school, and we give generous scholarships out of our profits (not Taxpayer money). Currently and for the foreseeable future we are awarding all our students $5,000 scholarships, bringing their cost down to $4,600 for the full 800 hour program, plus our 12 week Shiatsu program for free. So far we have had students licensed in both Connecticut and Rhode Island, 2 states that require accreditation, as the accreditation requirement is viewed as equivelant to licensure by the state DOE. Accreditation is a ridiculous treadmill whose primary purpose in my opinion is to create jobs for accreditors, and enable schools to collect thousands of dollars in extra money from taxpayers as Pell grants. The state DOE here reports many more problems arising from accredited schools than from non-accredited schools. Hey Relax and Rejuvenate who are you? Are you connected to any school?
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Yes, that is one of my points, the prices charged by the corporate chain schools are abusive. The secret is that the school business is incredibly profitable. The margins are huge, we just take less profits than the big corporate schools. We make normal salaries, not millions like the owners of the corporations. By the way, how did you get the Cortiva tuition info, they treat it like a military secret, I've never been able to find their tuition on a public listing. I thought it was a couple thousand more dollars than what you quote, based on hearsay. Any Cortiva grads out there want to weigh in on what it costs to go there?
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No great secret. Cortiva lists their tuitiion and fees on their website.
If you can afford to cut your profits by $5,000 per student and still make a living, then I would say your profits are equally abusive. Cortiva and company have greater overhead -- being accredited, their staff and infrastructure, processing those Pell Grants and student loans etc. Just like MTs who accept insurance charge a different rate for insurance billed services to account for the overhead in handling such payments. I guess those MTs are equally evil as Cortiva.
On a % basis, I don't think your school's normal tuition results in a dissimilar % profit from the corporate schools. You already mis-judged the profit by the several thousand dollars you thought they charged in tuition.
There is a very simple rule in business -- unusually high profits don't last unusually long, as they invite competition and erosion. Indy schools made $$$, Cortiva saw that and got in the game and made $$ better than most. Same is true of high growth businesses. EVERYONE fades to the average, usually within 5 years. Just ask Massage Envy or Microsoft.
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Aside from profits which was only one issue mentioned what about continuing education? One of my main concerns is that chain schools concentrate on (what I regard as excessive) long hours of core curriculum for entry level therapists while neglecting providing CE for experienced therapists to continue growth. I do not regard webinair classes on the internet as adequate replacement for a teacher's attention and class experience with other students to touch.
It isn't a one issue concern. And the tuition cost is determined mostly by how many base hours are needed. I realize that schools are not entirely to blame for State requirements of hours but when they lobby for it they are part of my concern.
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Permalink Reply by Gordon J. Wallis on
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Its a bit off the subject but...I have a pet peeve with massage schools in general..I just seem to be different or dyslexic or something.. Ive visited a few schools...One local school wanted me to teach..The head instructor (owner) knew I'd been massaging for years..And wanted me to teach...She wanted me to look over the curriculum and tell her if I wanted too or not.. After I looked it over.. I told her I couldnt teach this stuff...She asked why...I said I dont know any of it...She said, But Gordon, you're a proffesional massage therapist..And I told her.. Well, I guess you dont need to know any of this stuff to be a professional massage therapist...lol...Id like to see a school that breaks things down into two main catagories, or sections...One section simply teaches how to pass and study for the various state boards and exams.. The other section or part of the training is simply that...Professional massage therapists instructing and telling students what they know, without curriculum or tests. Just pure guidance .. This is what I do, and why...And let the students learn from different professionals on different days...So they can figure out their own unique path in a real way..And at the same time do serious study for their exams, knowing that its part of the process, and has nothing to do with their actual massage work or survival as a full time therapist. Its like Ive had students tell me they always have trouble remembering which end of the muscle is the insertion and which is the origin...And they want to know how I remember.. They look shocked when I tell them I dont bother to remember, and could care less...All I know is that the muscle attaches here and their...And most of the time I dont even need to know that.. lol So these students graduate with,, in my point of view.. some kind of weird mindset about massage in general...And then when they think they get carpal tunnel.. Run to the doctors...Am I making any sense? Something seems off is all.. Too me.. lol
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