Multibrand Beauty And Personal Care Company Waldencast Acquisition Corp. Goes Public Via SPAC
Waldencast Acquisition Corp. is now trading on the NASDAQ.
The multibrand beauty and personal care vehicle formed by beauty investment firm Waldencast Ventures and Felipe Dutra, formerly CFO of Anheuser-Busch InBev, has gone public via a special purpose acquisition company or SPAC. Amassing over $345 million, the IPO includes an additional investment of up to $333 million in forward purchase agreements, bringing the total proceeds of the transaction to around $678 million.
The news comes on the heels of Waldencast Ventures’ investment in the skincare brand Revea and the successful divesture of the Brazil-inspired beauty brand Costa Brazil to Biossance parent company Amyris. Michel Brousset, previously group president of L’Oréal’s North American consumer products division, founded Waldencast Ventures in 2019 and will serve as CEO of Waldencast Acquisition Corp. Dutra will be in the executive chairman role. Hind Sebti, former general manager of L’Oréal, will be the company’s COO.
As stated in Waldencast Acquisition Corp.’s S-1 IPO registration, the newly incorporated blank check company’s vision is “to build a global best-in-class beauty and wellness operating platform that will rival current incumbents by creating, nurturing, and scaling the next generation of conscious, purpose-driven brands. We intend to seek brands with a direct connection to today’s evolving consumers whose goals include pursuing social responsibility, inclusiveness, sustainability and transparency.”
Waldencast Ventures will remain a separate entity for the time being. In addition to Revea, Waldencast Ventures’ portfolio contains clean color brand Kjaer Weis, Brazilian direct-to-consumer beauty company Sallve and soon-to-be-launched luxury skincare range Whind.
With $633 million to invest, Waldencast is expected to pursue deals in the $1.5 billion to $3 billion range. “With this much dry powder at their disposal, they’ve armed themselves to compete in the big league alongside the largest PEs and strategics,” says entrepreneur-investor Nader Naeymi-Rad, co-founder of Beauty Independent parent company Indie Beauty Media Group. “What they’re looking for is a company to merge with that allows them to deploy most if not all of their capital to get the deal done. And there’s a relatively limited number of beauty and wellness companies out there that they could possibly go after, so it’s fair to hypothesize that they already have a pretty well-established target list.”
Waldencast Acquisition Corp. is the latest in a string of SPACs in the beauty and personal care space. In October 2020, Hims went public via SPAC, followed by HydraFacial entering into a definitive merger agreement with SPAC Vesper Healthcare Acquisition Corp. in December. In January, Clique Brands CEO and co-founder Katherine Power started the SPAC Powered Brands with Dana Settle, founding partner at venture capital firm Greycroft, with the goal of acquiring between $800 million and $1.5 billion worth of assets in the beauty space. Powered Brands zeroes in on sustainable and digital brands.
SPAC fever has captured Wall Street. According to the Wall Street Journal, SPACs listed in the United States raised $82 billion in 2020, a more than sixfold jump from 2019. There are over 400 blank-check companies on the market, with everyone from Serena Williams to Jay-Z jumping into the SPAC fray. However, there’s rising speculation that the SPAC bubble could burst.
Regardless of the future of SPACs, the strength of beauty and personal mergers and acquisitions hasn’t taken substantially frayed despite the pandemic’s deleterious effects on the category generally. Estée Lauder recently upped its stake in The Ordinary-linked company Deciem, Yatsen Holding picked up skincare company Eve Lom, and American Securities took over Conair.
“What this deal proves is that the market’s appetite for beauty and wellness brands is far from satiated, and that the SPAC phenomenon far from over.” Naeymi-Rad concluded, “what is interesting about Waldencast is not just their impressive pile of capital, but the equally impressive line-up of experienced operators they’ve assembled. We can confidently say that the M&A arms race in beauty just got kicked into a new high gear.”