- The stock price of Medirom Healthcare Technologies Inc (NASDAQ: MRM) is trading at over 80% pre-market today. This is why it happened.
The stock price of Medirom Healthcare Technologies Inc (NASDAQ: MRM) – a Japanese-based holistic healthcare company – is trading at over 80% pre-market today. Investors are responding positively to MEDIROM Healthcare announcing that it has entered into a share transfer agreement with all of the existing shareholders of ZACC Kabushiki Kaisha, a Japanese hair salon operator of “ZACC” brand, pursuant to which it will acquire 100% of the shares of ZACC through a two-stage acquisition for total consideration of 370 million Japanese yen. ZACC owns and operates 3 luxury hair salon brands, ZACC vie, ZACC raffine, and Zacc ginza – all of which has been recognized by customers for over 30 years for their high level of techniques and hospitality.
The first stage of the acquisition is scheduled for closing on October 1, 2021, when the shareholders of ZACC will transfer 60% of the common shares of ZACC to the company. And the second stage, at which point the remaining shares of ZACC will be transferred to the company, is scheduled to close on January 1, 2022. The purchase price will be paid by cash on hand, and an initial payment of ¥69,013,698 ($627,112.20) was made on August 31, 2021. The payments of ¥152,986,302 ($1,390,152.68) and ¥148,000,000 ($1,344,843.25) will be made on October 1, 2021 and January 1, 2022, respectively.
MEDIROM Healthcare Technologies also announced its major Key Performance Indicators, or KPIs, updated for the month of August 2021. The data is provided for all salons for which comparative financial and customer data is available and excludes certain salons where such information is not available.
The following monthly KPIs provide insight into the business fundamentals and progress of the company, updated for the month of August 2021:
— The number of salons was 315 in August 2021, up from 284 in the year-ago period, primarily as a result of the acquisition of another brand in May 2021.
— Total customers served were 66,323 in August 2021, almost no change from August 2020.
— Sales per customer increased to JPY 6,592 in August 2021, up from JPY6,351 in August 2020. The increase is attributed to the upselling of value-added optional services.
— The repeat ratio, a measure of repeat customers, was 81.3% in August 2021, almost no change from August 2020.
— The operation ratio was 46.5% in August 2021, decreasing from 47.5% in the year-ago period.
— Total number of salons with data was 221 in August 2021, no change from August 2020. The number of salons with data decreases when we close salons with data available and increases as we open salons with such data.
KEY QUOTE:
“We continue to pursue the growth of our business by acquiring assets that expand our presence throughout Japan. We aim to combine mutual services such as high-end beauty services and relaxation services by leveraging the high brand power of ZACC and the Company and to support opening of new ZACC brand salons by sharing the Company’s expertise in franchising, employee independence programs, etc.” commented
— MEDIROM Founder and CEO Kouji Eguchi
