11.15.21
Waldencast Acquisition Corp., a special purpose acquisition company founded by two former L’Oréal execs, has entered into definitive simultaneous business combination agreements with skin care brand Obagi and award-winning makeup and skin care brand Milk Makeup.
The approximately $1.2 billion three-way transaction is a first step in Waldencast’s strategy to create a global best-in-class multi-brand beauty and wellness platform.
Obagi is a physician-dispensed brand in the dermo-cosmetic space. It is recognized for its clinical excellence, industry-leading innovation, and science-backed approach. Strongly anchored in the medical space through practitioners’ recommendation, its products also span the consumer and spa segment.
Milk Makeup is a high-growth, cult-favorite beauty brand among Gen-Z consumers. The brand is built on the promise of clean, cool beauty that works with best-selling hero products at key retailers.
Waldencast’s co-founder, Hind Sebti, who has over 20 years of beauty-specific operational experience at L’Oréal and Procter & Gamble will act as chief operating officer.
Tassilo Festetics, who will serve as chief financial officer and chief technology officer, has held various financial roles across multiple geographies over a nearly 15-year career at AB InBev, where he served as global VP of technology as well as CFO of AB InBev Asia.
Felipe Dutra, who will serve as executive chairman of Waldencast, is the former CFO/CTO of AB InBev and has over 30 years of global experience in M&A, capital markets execution, implementation of financial and operational strategy best practices, and delivery of superior growth and shareholder value.
Obagi CEO Jaime Castle and Milk Makeup CEO Tim Coolican will remain responsible for their respective businesses, reporting to Michel Brousset and working closely with the Waldencast’s leadership team to accelerate profitable growth while preserving each brand’s distinct DNA and entrepreneurial spirit.
He continued, “I greatly admire Obagi and Milk Makeup, both leaders in their respective categories, and I am looking forward to working with Jaime and Tim to further accelerate the growth of their respective brands, while preserving each brand’s unique business model. We believe the brands will benefit strongly from the Waldencast ecosystem, bringing operational scale, and attracting best-in-class talent and capabilities.”
Jaime Castle said, “Waldencast’s ambition to build a global best-in-class beauty and wellness company that embraces conscious, purpose-driven brands is aligned with Obagi’s purpose, vision and values, making Waldencast an ideal fit. I look forward to working with Michel and the team as we continue to develop effective, science-based skin care that includes and embraces the full spectrum of beauty and self-care.”
Tim Coolican remarked, “Our community has always been the heartbeat of our company and Milk Makeup’s mission is to celebrate and serve them. We found in Waldencast like-minded partners who share our values and commitment to building a global beauty movement rooted in community, self-expression, inclusion, and social purpose.”
The transaction will be funded by $345 million of IPO cash proceeds (subject to any redemptions); a fully committed $333 million Forward Purchase Agreement of which $160 million is provided by the sponsors (Waldencast Long-Term Capital LLC and Dynamo Master Fund); a fully committed $105 million PIPE priced at $10.00 per share; and $475 million of Seller rollover equity.
Obagi’s and Milk Makeup’s existing shareholders are expected to hold equity of 20.5% and 14.9% respectively (without giving effect to any redemptions), in Waldencast.
The transaction includes significant sponsor alignment with other shareholders in the form of the $160 million FPA committed capital. Notably, the leadership team of Waldencast will directly operate the combined business with a focus on driving growth and shareholder value.
The business combination has been unanimously approved by the boards of Waldencast, Obagi, and Milk Makeup. The combination with Obagi and Milk Makeup is expected to close in the first half of 2022, subject to, among other things, approval by Waldencast shareholders and the satisfaction, or waiver, of other customary closing conditions.
Upon the closing of the transactions with Obagi and Milk Makeup, both companies will become part of the Waldencast portfolio, and listed on Nasdaq under the symbol “WALD.”
The approximately $1.2 billion three-way transaction is a first step in Waldencast’s strategy to create a global best-in-class multi-brand beauty and wellness platform.
Obagi is a physician-dispensed brand in the dermo-cosmetic space. It is recognized for its clinical excellence, industry-leading innovation, and science-backed approach. Strongly anchored in the medical space through practitioners’ recommendation, its products also span the consumer and spa segment.
Milk Makeup is a high-growth, cult-favorite beauty brand among Gen-Z consumers. The brand is built on the promise of clean, cool beauty that works with best-selling hero products at key retailers.
Waldencast Leadership
Waldencast will be led by founder and CEO Michel Brousset, who has over 25 years of experience leading and scaling global consumer and beauty brands at L'Oréal and Procter & Gamble. Prior to founding Waldencast, Brousset was group president of L’Oréal North America Consumer Products.Waldencast’s co-founder, Hind Sebti, who has over 20 years of beauty-specific operational experience at L’Oréal and Procter & Gamble will act as chief operating officer.
Tassilo Festetics, who will serve as chief financial officer and chief technology officer, has held various financial roles across multiple geographies over a nearly 15-year career at AB InBev, where he served as global VP of technology as well as CFO of AB InBev Asia.
Felipe Dutra, who will serve as executive chairman of Waldencast, is the former CFO/CTO of AB InBev and has over 30 years of global experience in M&A, capital markets execution, implementation of financial and operational strategy best practices, and delivery of superior growth and shareholder value.
Obagi CEO Jaime Castle and Milk Makeup CEO Tim Coolican will remain responsible for their respective businesses, reporting to Michel Brousset and working closely with the Waldencast’s leadership team to accelerate profitable growth while preserving each brand’s distinct DNA and entrepreneurial spirit.
Comments from Leadership
Michel Brousset commented, “Partnering with Obagi and Milk Makeup is a major milestone in our ambition to build a best-in-class global multi-brand beauty platform, which will be home for the next generation of high-growth, purpose-driven brands.He continued, “I greatly admire Obagi and Milk Makeup, both leaders in their respective categories, and I am looking forward to working with Jaime and Tim to further accelerate the growth of their respective brands, while preserving each brand’s unique business model. We believe the brands will benefit strongly from the Waldencast ecosystem, bringing operational scale, and attracting best-in-class talent and capabilities.”
Jaime Castle said, “Waldencast’s ambition to build a global best-in-class beauty and wellness company that embraces conscious, purpose-driven brands is aligned with Obagi’s purpose, vision and values, making Waldencast an ideal fit. I look forward to working with Michel and the team as we continue to develop effective, science-based skin care that includes and embraces the full spectrum of beauty and self-care.”
Tim Coolican remarked, “Our community has always been the heartbeat of our company and Milk Makeup’s mission is to celebrate and serve them. We found in Waldencast like-minded partners who share our values and commitment to building a global beauty movement rooted in community, self-expression, inclusion, and social purpose.”
Details of the Transaction
Under the terms of the definitive merger agreement, the transaction is valued at a proforma enterprise value of approximately $1.2 billion.The transaction will be funded by $345 million of IPO cash proceeds (subject to any redemptions); a fully committed $333 million Forward Purchase Agreement of which $160 million is provided by the sponsors (Waldencast Long-Term Capital LLC and Dynamo Master Fund); a fully committed $105 million PIPE priced at $10.00 per share; and $475 million of Seller rollover equity.
Obagi’s and Milk Makeup’s existing shareholders are expected to hold equity of 20.5% and 14.9% respectively (without giving effect to any redemptions), in Waldencast.
The transaction includes significant sponsor alignment with other shareholders in the form of the $160 million FPA committed capital. Notably, the leadership team of Waldencast will directly operate the combined business with a focus on driving growth and shareholder value.
The business combination has been unanimously approved by the boards of Waldencast, Obagi, and Milk Makeup. The combination with Obagi and Milk Makeup is expected to close in the first half of 2022, subject to, among other things, approval by Waldencast shareholders and the satisfaction, or waiver, of other customary closing conditions.
Upon the closing of the transactions with Obagi and Milk Makeup, both companies will become part of the Waldencast portfolio, and listed on Nasdaq under the symbol “WALD.”