ALBERTO ADDS TO ETHNIC LINEUP

Byline: Julie Naughton

NEW YORK — The ethnic market continues to be a hot target for acquisitions.
Alberto-Culver, which announced this week that it had signed an agreement to purchase Pro-Line Corp., a Dallas-based manufacturer and marketer of personal care products for the African-American market, became the second major corporation in less than a month to invest in this segment of the market.
The first was Cosmair, which announced on Feb. 28 that it would purchase Carson Products, a Savannah, Ga., ethnic products manufacturer. The Cosmair-Carson deal, reportedly worth $250 million, is expected to become final this month.
Terms of Alberto-Culver’s cash purchase of Pro-Line, which is expected to close by the end of March, were not disclosed, although industry sources estimated Alberto-Culver spent about $70 million to acquire the company.
“We’ve been participating in the ethnic category for many years, and this deal will make us the number-two worldwide player in the ethnic market,” said Howard B. Bernick, president and chief executive officer of Alberto-Culver.
The company already owns TCB and Motions, which are brands of styling, conditioning and relaxing products for people of color. “We introduced TCB more than 25 years ago and added Motions five years ago. Together, these brands now contribute well over $50 million in global sales,” said Bernick.
“Because of the success of both of those brands, we have been looking for opportunities to expand our holdings in the ethnic category,” he continued. “We looked at many companies and we felt that Pro-Line presented the most ideal opportunity for Alberto-Culver because of its products, the company’s consistency of performance and its management and sales teams.”
Pro-Line, whose 1999 sales topped $45 million, markets four lines of relaxers and relaxer care items. They are Soft & Beautiful, aimed at 25-to-49-year-old women; Comb-Thru, marketed to 12-to-49-year-old men; Soft & Beautiful Botanicals, designed for sensitive scalps, and Just for Me, a children’s line. The company also markets Perm Repair, a deep-conditioning line.
Pro-Line products are sold in food stores, drugstores, mass market outlets and beauty supply stores, including the Sally Beauty Supply chain owned by Alberto-Culver.
As reported, after the deal is completed, Pro-Line will be run as an independent business unit of Alberto-Culver. Its headquarters will remain in Dallas and its current management team, headed by president Eric Brown and executive vice president Renee Cottrell Brown, will remain with the company.
“We have been talking with Alberto-Culver for some time about the future of Pro-Line,” said Comer J. Cottrell, founder and chairman of Pro-Line. “We are excited about their commitment to growing our brands and the global resources and enthusiasm that they bring to our business. I am particularly pleased to see that Pro-Line’s management team, headed by Eric and Renee Brown, will be joining Alberto-Culver and leading a global effort to join their brands and ours in the ethnic personal care category.”
Bernick said the Pro-Line purchase would strengthen Alberto-Culver’s position in the relaxer market. “We already have a very strong presence in that market, but this acquisition will allow us to leverage our strengths,” he said. “And since Pro-Line has a 50 percent share of the children’s relaxer market, it will give us the number-one position in that market.”
Bernick aims to expand Pro-Line’s business outside U.S. borders. About 20 percent of Alberto-Culver’s ethnic business, he said, is international — mostly in the Caribbean, Western Europe and Africa.
“Pro-Line is exported, but it is primarily a domestic business at present,” said Bernick. “We plan to use our global experience to develop that business further.”
Global development for all three Alberto-Culver ethnic properties is planned, he said. “TCB has been available overseas for years, and we’re still in the beginning stages with Motions. We see a lot of potential for all our ethnic brands in Africa and Brazil.”
Global development of all three brands will be overseen by Rohn Hamel, a 20-year veteran of Alberto-Culver. Hamel, who helped develop the Motions line and who has helped build both Motions and TCB, will become a vice president of Pro-Line when the deal is completed, said Bernick. In addition to his global responsibilities and his new Pro-Line role, Hamel will continue to oversee the Motions brand domestically.
Alberto-Culver’s overseas manufacturing and distribution facilities — including its Scandinavian packaged goods operation, Cederroth; its Argentinian facility, LaFarmaco; its Chilean firm, Key Co., and its newly acquired Polish skin care firm, Soraya — will help foster international growth, said Bernick.
“Alberto-Culver has manufactured overseas for more than 30 years and has more than 16 facilities overseas,” said Bernick. “We will utilize all of these resources in our global expansion.”
Also, as part of its continuing commitment to the ethnic category, said Bernick, Alberto-Culver will relaunch and repackage the TCB line later this spring.

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