Waldencast To Acquire Obagi and Milk Makeup in Three-Way $1.2 Billion Transaction

Waldencast Acquisition Corp., a special purpose acquisition company, has entered into definitive simultaneous business combination agreements with Obagi and 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.
 

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; 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, in Waldencast.
 
Obagi is a physician-dispensed brand in the dermo-cosmetic space, the highest-growth category in skin care.  Milk Makeup is a cult-favorite beauty brand among Gen-Z consumers and a leader in clean beauty.
 
Waldencast will be led by founder and CEO Michel Brousset, who has more than 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. 
 
Obagi CEO Jaime Castle and Milk Makeup CEO Tim Coolican will remain responsible for their respective businesses, reporting to Brousset and working closely with the Waldencast’s leadership.
 
Waldencast’s Hind Sebti, who has more than 20 years of beauty-specific operational experience at L’Oréal and Procter & Gamble, will act COO. 

“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,” said Brousset. “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.”

According to Jaime Castle, CEO of Obagi, 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.”
 
“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,” said Tim Coolican, CEO of Milk Makeup.
 
Mazdack Rassi, Milk Makeup co-founder and chief brand officer, called Waldencast the “perfect home for Milk Makeup to achieve its full potential.” 
 
The acquisition 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.”