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Manscaped Inks $1 Billion SPAC Deal

November 29, 2021 BeautyMatter
November 29, 2021
Manscaped

Manscaped, the men's grooming start-up backed by Channing Tatum, announced a SPAC deal with blank-check firm Bright Lights Acquisition Corp in a deal that values the company at $1 billion.

WHO: Founded by Paul Tran in 2016, San Diego, California-based Manscaped focuses on grooming and hygiene below the waist. The product range includes only the best tools, formulations, and accessories for a simple, effective, and elevated male grooming routine. Manscape offers direct-to-consumer shipping in more than 30 countries, spanning the United States, Canada, Australia, New Zealand, the United Kingdom, and the European Union. Retail placement includes Target and Best Buy locations throughout the US.

WHY: Manscaped opted for the SPAC deal with Bright Lights in part because of the access to celebrities the group has. Singer Ciara is on the company's board, Bright Lights CEO Michael Mahan is Vice Chairman of Dick Clark Productions, and Bright Lights co-chairman Allen Shapiro manages an investment company that specializes in early-stage consumer brands. The deal will position the business to accelerate growth, to invest in product development while extinguishing debt and fund potential acquisitions.

IN THEIR OWN WORDS: "The marketing efficiency leads to capital efficiency," Tran said. "We're able to recycle our marketing costs, so unlike other businesses where the customer acquisition cost gets paid off over multiple months…for us, we recoup that marketing cost as soon as a customer purchases one of our products."

“We went from $3 million to nearly $300 million in just three years with only $23 million in capital," Tran said. "It's really capital-efficient, to have that kind of growth.”

Investors have committed to a $75 million private investment in public equity, or PIPE, according to Bright Lights CEO Michael Mahan. It's priced at $9.20 a share, representing an appropriate "illiquidity discount" to compensate investors for locking up capital in coming months, he said.

Bright Lights co-Chairmen John Howard and Allen Shapiro previously invested in brands such as Aviation Gin, backed by Ryan Reynolds, as well as Skims, founded by Kim Kardashian, Mahan said.

DETAILS:

  • The deal is expected to give Manscaped about $305 million in proceeds and value the business at about $1 billion, including a $75 million fully committed common-stock private investment in public equity, or PIPE, at $9.20 a share.
  • PIPE investors include actor Channing Tatum, Endeavor Group Holdings Inc., Signia Venture Partners, Saban Capital Group, Guggenheim Investments, and funds managed by UBS O'Connor. Existing Manscaped shareholders are expected to own about 72% of the combined company.
  • The combined company will be led by Manscaped founder and Chief Executive Paul Tran.
  • The company said it is profitable, has a trailing 12-month revenue of $285 million, and expects to hit $500 million in sales in 2023.
  • Manscaped is sold in 38 countries with plans to expand into new international markets and launch new products.
  • 70% of Manscaped's shoppers become subscription customers.
  • The combined company will be renamed Manscaped Holdings and will trade under the ticker MANS; the transaction is expected to be completed in the first quarter.
  • After closing, the company expects to have $235 million on the balance sheet and no debt.
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