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Milk Makeup and Obagi Owner Waldencast Goes Public

July 28, 2022
July 28, 2022
Milk Makeup

Waldencast Acquisition Corp., a special purpose acquisition company, leading physician-dispensed, results-driven skincare brand Obagi Skincare, and award-winning makeup and skincare brand Milk Makeup announced the completion of their business combination.

WHO: Founded by Michel Brousset and Hind Sebti, Waldencast's vision is to build a global best-in-class beauty and wellness operating platform by developing, acquiring, accelerating, and scaling the next generation of conscious, purpose-driven brands. Waldencast Acquisition Corp. entered into agreements regarding its business combination with Obagi Skincare and Milk Makeup as a first step in realizing its vision. Waldencast intends to seek brands with a direct connection to today's evolving consumers whose goals include pursuing social responsibility, inclusiveness, sustainability, and transparency. Its goal is to become the partner of choice for next-generation brands and consumers by leveraging the collective leadership and the industry-specific operating experience of its management team.

Waldencast's global operating company will enable brands, including Obagi Skincare and Milk Makeup, to benefit from the operational scale of a multi-brand platform with expertise in managing global beauty brands at scale, a balanced portfolio to mitigate category fluctuations with asset-light efficiency, and the market responsiveness and speed of entrepreneurial indie brands.

WHY: Waldencast's vision is to build a global best-in-class beauty and wellness operating platform by developing, acquiring, accelerating, and scaling the next generation of conscious, purpose-driven brands.

IN THEIR OWN WORDS: Michel Brousset, CEO of Waldencast, said, "We are proud to announce that we have closed our business combination with Obagi Skincare and Milk Makeup. This marks the first step in our mission to create a global best-in-class beauty and wellness company that embraces conscious, purpose-driven brands. By becoming part of the Waldencast platform, Obagi Skincare and Milk Makeup can capitalize on their hugely successful brands, gain access to capital and benefit from the Waldencast ecosystem to further accelerate growth, while preserving their entrepreneurial spirit, unique DNA and values."

Hind Sebti, Chief Growth Officer of Waldencast, added, "When Michel and I launched Waldencast, our passion and dream was to create a house of brands that helps evolve the beauty industry through a purpose-driven approach and philosophy and support brands aligned with our mission and values in their growth strategies. Our first step towards this goal starts with Obagi Skincare and Milk Makeup—beloved, purpose-driven, high-growth brands, anchored in some of the fastest-growing beauty categories. I could not be more excited to partner with both fantastic brands as they grow."

Felipe Dutra, Executive Chairman of the Board of Directors of Waldencast, said of the business combination, "The Board and I are excited to complete the business combination and for the future of the company. The Waldencast platform is built to support and accelerate brands like Obagi Skin Care and Milk Makeup and help them reach their full potential. The Waldencast, Obagi, and Milk leadership teams combine years of industry specific operational experience with a passion for beauty and the proven ability to navigate a dynamic business environment."

DETAILS:

  • Waldencast plc began trading on Nasdaq under the ticker symbol "WALD" starting on July 28, 2022.
  • In November 2021, Waldencast Acquisition Corp., a special purpose acquisition company, entered into a definitive simultaneous business combination agreement with Obagi and Milk Makeup valued at a pro forma enterprise value of approximately $1.2 billion.
  • According to regulatory filings, Milk's net revenue was around $47 million in 2021, up from $40 million in 2020, and Waldencast is forecasting it will likely come in at about $66 million this year. The hope for 2023 is that net sales will top $100 million.
  • Obagi closed 2021 with net sales of $179 million, up from $90 million, and is expected to finish 2022 with about $190 million in sales. The forecast for 2023 is approximately $213 million. Adjusted EBITDA was $44 million in 2021, up from $7 million the prior year. That is expected to rise to $50 million this year.
  • Waldencast will be led by founder and CEO Michel Brousset and founder, COO, and Chief Growth Officer Hind Sebti; Obagi Skincare CEO Jaime Castle and Milk Makeup CEO Tim Coolican will continue to lead their respective brands. Felipe Dutra will serve as Executive Chairman of the Board of the Directors.
  • J.P. Morgan Securities LLC acted as capital markets advisor and lead financial advisor, and Credit Suisse acted as capital markets advisor and financial advisor to Waldencast. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Waldencast. Lazard was financial advisor to Obagi, and Financo Raymond James was financial advisor to Milk Makeup. Latham & Watkins served as legal counsel to Obagi, and Goodwin Procter served as legal counsel to Milk Makeup.
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