Sally Beauty gets early tenders for $59.5 million of 2023, 2025 notes

By Marisa Wong

Morgantown, W.Va., March 5 – Sally Beauty Holdings, Inc. said that holders have tendered $57.3 million of 5 5/8% senior notes due 2025 and $2.2 million of 5½% senior notes due 2023 as of 5 p.m. ET on March 4, the early tender date of its previously announced cash tender offers.

On Feb. 19, indirect wholly owned subsidiaries Sally Holdings LLC and Sally Capital Inc. had begun cash tender offers to purchase up to $100 million in aggregate purchase price of their outstanding $750 million notes due 2025 and $200 million notes due 2023.

On Tuesday, Sally Beauty also announced that it is extending the deadline for holders to tender their notes in order to receive the total consideration to midnight ET at the end of March 18, which is the expiration date of the tender offers.

Originally, only holders tendering by the early tender date were eligible to receive the total consideration, which includes an early tender payment of $30 per $1,000 principal amount.

The total consideration per $1,000 principal amount is $980 for the 5 5/8% notes and $1,000 for the 5½% notes.

Sally Beauty will also pay accrued interest to but excluding the applicable settlement date.

Settlement for the early tendered notes is expected to take place on March 6. The final settlement date is expected to be on March 20.

Tenders may no longer be withdrawn.

Notes will be accepted according to their acceptance priority level. The 2025 notes have priority level 1, and the 2023 notes have priority level 2.

However, notes tendered at or prior to the early tender date will be accepted for purchase with priority over notes tendered after the early deadline, regardless of the priority of the series of the later tendered notes.

In addition, no more than $25 million principal amount of the 2023 notes will be purchased in the offers.

Acceptance for tenders of any notes may be subject to proration if the aggregate principal amount for any series of notes tendered would cause the tender cap to be exceeded. Acceptance for tenders of the 2023 notes may also be subject to proration if the aggregate principal amount of those notes tendered is greater than the 2023 series cap.

Had the offers been fully subscribed as of the early tender date, holders tendering notes after the early deadline would not have any of their notes accepted for purchase, and there would be no final settlement date.

Sally Beauty said it reserves the right, but is under no obligation, to increase the overall tender cap or the 2023 series cap.

The offers are not conditioned on any minimum amount of notes being tendered.

Sally Beauty intends to fund the tender offers with cash on hand and borrowings under its asset-based revolving credit facility.

The dealer manager for the tender offers is BofA Merrill Lynch (888 292-0070 or 980 388-3646). The information agent is Global Bondholder Services Corp. (866 924-2200 or, for banks and brokers, 212 430-3774).

Sally Beauty is a Denton, Texas-based retailer and distributor of professional beauty supplies.

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