Former L’Oréal Executives Crafting $1.2B Beauty Company Through SPAC

Skincare company Obagi and makeup brand Milk Makeup are joining forces through a special purpose acquisition company (SPAC) deal with Waldencast Acquisition Corp. — an acquisition-focused entity founded by two former L’Oréal execs — in a merger that puts their combined value at about $1.2 billion.

Vegan makeup brand Milk Makeup is sold at Sephora and other retailers, while Obagi’s suite of products focused on minimizing sun damage, aging and acne is sold largely through dermatologists and other skincare professionals, according to a report in The Wall Street Journal on Monday (Nov. 15).

Waldencast will be led by co-founder/CEO Michel Brousset, who was group president of L’Oréal North America Consumer Products, and co-founder/COO Hind Sebti, who has worked at L’Oréal and Procter & Gamble.

“We are trying to build a next-generation company that values sustainability, responsibility and inclusivity,” said Brousset in the WSJ report, adding they will now target small, “purpose-driven” beauty and wellness brands to focus on growing their suite of acquired companies.

Waldencast went public in March and has a market value of more than $400 million, the WSJ report says.

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 don’t redeem their SPAC shares. Two forward-purchase agreements will add more cash to the company, including $160 million in sponsor capital and a 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.

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