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Alberto-Culver still on acquisition trail

By Simon Pitman , 12-May-2006

Alberto-Culver says it is still looking for further acquisitions, despite being hit with significant costs after pulling out of its proposed acquisition of Regis last month.

Speaking at a conference broadcast over the web yesterday, Alberto-Culver Chief Executive Howard Bernick said that the company was definitely still on the look-out for further acquisitions, despite incurring penalties amount to more than $50m for breaking its agreement with Regis.

"We think there are some exciting acquisition opportunities out there, but you shouldn't expect us to do anything extreme or out of the ordinary," Bernick said during the conference call.

He stressed that the company's philosophy as far as acquisitions is to pursue smaller companies with a view of fulfilling their full potential through investments and synergies.

"Go for something small and make it big," Bernick said.

He also added that the business, which is primarily known for the hair care and skin care brand such St Ives, would probably not be looking to the consumer sector for its next acquisition.

Bernick also re-iterated that he was still mulling the idea of splitting its distribution and sales businesses from its consumers business.

Alberto-Culver's was to have acquired the Regis beauty salon business through its salon division, Sally Beauty. However, it announced the termination of its merger agreement with Regis, citing 'uncertainties' combined with differences over operating and governance approaches.

The company has already had to pay a $5.7m charge to Regis following the break-down of the deal and is now planning a further third quarter charge of $31.3m.

However, strong financial results mean that the company is in a good position, and with the prospect of sales remaining strong for the rest of the year, this means that further acquisitions remain a reality.

At the end of last month the company reported that sales for the fiscal 2006 first half grew by 6.6 per cent to $1.85 billion, while net earnings for the first half including non-core items increased 10.6 per cent to $109.0 million.

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