The transaction is expected to be complete in December.Alberto-Culver shareholders will continue to own 100% of theAlberto-Culver business, and 52.5% of Sally Beauty Supply. A fundmanaged by Clayton, Dubilier & Rice (CD&R) will invest atleast $575 million to acquire the remaining 47.5% of Sally. Whenthe spin-off is complete in December, the independent Sally BeautySupply will be a $2.3-billion business with 2,465 Sally Beautystores and 825 Beauty Systems Group (BSG) outlets.

"CD&R sees opportunities at accelerating the Sally growthrate, not only in the US, but internationally," said GaryWinterhalter, president of Sally Beauty Co., during a conferencecall Monday. "They also see opportunities on the Beauty SystemsGroup side of the business." The deal also can expand Sally'sretail product lines.

"Conflicts have developed over the last few years between Sallyand BSG's many vendors being Alberto Culver rivals," said Howard B.Bernick, who will retire as Alberto-Culver's president and CEO whenthe spin-off is complete.