Obagi, which is a skincare company, and Milk Makeup, which is a vegan makeup brand, are joining hands through a special purpose acquisition company (SPAC) deal with Waldencast Acquisition Corp. Waldencast Acquisition Corp is the acquisition-focused entity that was founded by two former L’Oréal executives in a merger that puts their combined value at about $1.2 billion.
Milk Makeup is reportedly sold at Sephora and other retailers while Obagi’s suite of products focused on minimizing sun damage, aging and acne are sold largely through dermatologists and other skin care professionals.
“We are trying to build a next-generation company that values sustainability, responsibility and inclusivity,” Michel Brousset, Co-founder and CEO of Waldencast, said.
Brousset and Hind Sebti co-established Waldencast Acquisition Corp. Prior to Waldencast, Brousset was Group President of L’Oréal North America Consumer Products while Sebti has worked at L’Oréal and Procter & Gamble.
“We will now target small, purpose-driven beauty and wellness brands to focus on growing their suite of acquired companies,” Brousset added.
Waldencast went public in March and has a market value of more than $400 million, as per the Wall Street Journal’s report.
The acquisition of Milk Makeup and Obagi will be funded by $345 million in cash from the SPAC’s initial public offering (IPO), as long as investors do not redeem their SPAC shares. Two forward-purchase agreements will add more cash to the company, including $160 million in sponsor capital and private investment in public equity, or PIPE. Another $475 million will be added to Waldencast’s coffers in post-deal valuation from equity from Milk Makeup and Obagi.