HydraFacial Announces Merger

The HydraFacial Company and Vesper Healthcare Acquisition Corp. have entered into a definitive merger agreement pursuant to which HydraFacial and Vesper Healthcare will combine, and after which HydraFacial will become a public company. Upon completion of the transaction, the combined company expects to be listed on the NASDAQ exchange. 

The HydraFacial Company, Long Beach, CA, has a 23-year history. The company’s HydraFacial system offers an experiential, non-invasive and accessible skin treatment experience; its signature treatment utilizes an innovative approach using a delivery system to provide, within approximately 30 minutes, a three-step experience to cleanse, extract and hydrate skin. Treatments can be further customized the use of specific booster serums. The company was acquired in December 2016 by private equity firms Linden and DWHP, and since then, HydraFacial has generated compounded annual revenue growth of more than 50% through 2019. Overall, HydraFacial currently has more than 15,000 delivery systems in more than 87 countries globally with the HydraFacial and Perk products. In 2019, 3.2 million HydraFacial treatments were performed worldwide.

Vesper Healthcare is a special purpose acquisition company co-founded by Brent Saunders, former CEO of Allergan, Forest Laboratories and Bausch + Lomb.

Under the terms of the definitive merger agreement, the transaction is valued at a pro forma enterprise value of $1.1 billion. The purchase price consists of $975 million payable at closing and up to $75 million payable upon the completion of certain identified acquisitions by the combined company. The acquisition will be funded through a combination of cash in Vesper Healthcare’s trust account, proceeds from a common stock private placement led by premier institutional investors including Fidelity Management & Research Company, LLC, Redmile Group, LLC, Principal Global Investors, LLC, Camber Capital Management and Woodline Partners, LP and sellers’ rollover equity. HydraFacial expects to have a debt free balance sheet at closing. Vesper Healthcare, Linden and DWHP will each retain an equity stake in the combined company.

Future growth opportunities and investments for HydraFacial include training to improve esthetician education and build loyalty, investing in targeted sales and marketing, expanding global footprint, and accelerating R&D efforts to improve and elevate its offerings and create innovative products.

Upon the closing of the proposed transaction, HydraFacial’s senior management will continue to serve in their current roles. HydraFacial will continue to be led by Clint Carnell, CEO. Liyuan Woo will continue as CFO. Following the transaction, Brent Saunders, CEO of Vesper Healthcare will serve as executive chairman. Manisha Narasimhan, PhD, CFO of Vesper Healthcare, will join HydraFacial as chief strategy officer.

“We plan to leverage our infrastructure to bring to market additional innovative products backed by powerful technology. I am honored to partner with Brent and Manisha and look forward to benefiting from their insights as we embark on this new chapter,” said Carnell.

Brent Saunders, CEO and co-founder of Vesper Healthcare said, the goal is “to build a premier company in beauty health, focused on providers such as estheticians and nurse practitioners, consumers, and partners and we believe that HydraFacial is the perfect platform to achieve this goal.”

He continued, “HydraFacial possesses industry-leading consumer satisfaction scores and has presence in two high-growth categories within personal care – skincare and, more recently, hair care. We look forward to working with the HydraFacial team to create a valuable, industry-leading, global company in beauty health.”

The transaction, which has been unanimously approved by both Vesper Healthcare’s and HydraFacial’s boards of directors, is expected to close in the first half of 2021 and is subject to approval by Vesper Healthcare’s shareholders and other customary closing conditions, including any applicable regulatory approvals.