Several executives with experience building beauty and wellness brands launched a SPAC to target acquiring disruptive companies in the industry. A SPAC deal was announced Monday to bring two companies public.
The SPAC Deal: A three-way merger will bring Obagi and Milk Makeup public in a merger with SPAC Waldencast Acquisition Corp WALD.
The deal values the combined company at $1.2 billion.
Waldencast has a goal of building a “global best-in-class beauty and wellness multi-brand platform by creating, acquiring and accelerating the next generation of high-growth, purpose-driven brands that can benefit from the platform’s strong product and brand development capabilities.”
Current WALD public shareholders will own 25.7% of the company after the merger is completed. The deal is expected to be completed in the first half of 2022 with the company trading as Waldencrest and the ticker WALD.
Waldencast founder and CEO Michel Brousset has more than 25 years of experience building consumer and beauty brands with a history that includes L’Oreal and Procter & Gamble Co PG.
Other company executives have experience leading L’Oreal, P&G, Maybelline and Anheuser-Busch InBev SA BUD.
About Obagi: Operating in the dermo-cosmetic space, Obagi is a well-known brand that has used a science-based approach to build one of the top brands for U.S. providers.
Dermo-cosmetic is the highest growth category in skincare, according to the press release. The company’s mission is to make Obagi the top dermo credentialed brand in the world. Joint ventures are expected to be launched in China and Japan in the future.
Growth objectives for Obagi include expanding into consumer channels and expanding the company’s products to new countries.
Obagi is expected to post revenue of $168 million in fiscal 2021.
Related Link: November SPAC Merger Calendar: Upcoming Votes, Earnings, Stocks To Watch
About Milk Makeup: Vegan, clean and cruelty-free makeup brand Milk Makeup has built a loyal following amongst Gen-Z consumers according to the company.
The company sells more than 300 products through its website and retail partners. One of the company’s key retail partners is Sephora, the retail giant owned by LVMH Moet Hennessy Louis Vuitton SA LVMUY. Milk Makeup is the number-two clean makeup brand by sales in Sephora, including a leading position for face primer and mascara, according to the presentation.
Milk Makeup has more than 1.9 million Instagram followers and over 8.5 million likes on TikTok videos. Milk Makeup is called a makeup brand for the new generation and has a goal to become one of the world’s largest makeup brands.
Estimates call for Milk Makeup to have 2021 sales of $47 million.
Growth Ahead: Waldencrest executives point to a highly fragmented beauty brand market, which has seen emerging brands growth outpace legacy companies.
“Partnering with Obagi and Milke 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,” Brousset said. “We believe the brands will benefit from the Waldencrest ecosystem, bringing operational scale and attracting best-in-class talent and capabilities.”
The company expects combined revenue of $215 million in 2021. Revenue is expected to grow at a compounded annual growth rate of 21% from 2018 through 2023.
Price Action: WALD shares are up 2.15% to $9.99 on Monday afternoon at publication.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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