The company is merging with Vesper Healthcare, an SPAC co-founded by Brent Saunders, former CEO of Allergan.

The HydraFacialCompany and Vesper Healthcare, a special purpose acquisition company (SPAC) co-founded by Brent Saunders, former CEO of Allergan, have entered into a definitive merger agreement.

Under the terms of the agreement, HydraFacial and Vesper Healthcare will combine, and HydraFacial will become a public company. Upon completion of the transaction, the combined company expects to be listed on the NASDAQ exchange.  

The transaction is valued at a pro forma enterprise value of $1.1 billion. The purchase price consists of $975 million payable at closing and up to $75 million payable upon the completion of certain identified acquisitions by the combined company

HydraFacial’s senior management will continue to serve in their current roles upon the closing of the proposed transaction. HydraFacial will continue to be led by Chief Executive Officer, Clint Carnell. Liyuan Woo will continue as Chief Financial Officer. Following the transaction, Brent Saunders, CEO of Vesper Healthcare will serve as Executive Chairman. Manisha Narasimhan, PhD, CFO of Vesper Healthcare, will join HydraFacial as Chief Strategy Officer.

HydraFacial was acquired by private equity firms Linden Capital Partners and DW Healthcare Partners IV, LP in December of 2016. Since then, HydraFacial has generated compounded annual revenue growth of more than 50% through 2019. 

“We have a proven track record of growth in a large and growing market, we have developed a critical mass globally with over 15,000 delivery systems in operation and our business model provides us with a recurring revenue stream in consumables,” says Clint Carnell, HydraFacial CEO,  in a news release. “This, along with favorable demographic trends, supported by our experienced team which has been made even stronger by combining with Vesper Healthcare, has created a business model that we believe is well positioned to deliver sustained long-term growth. We plan to leverage our infrastructure to bring to market additional innovative products backed by powerful technology. I am honored to partner with Brent and Manisha and look forward to benefiting from their insights as we embark on this new chapter.”

Brent Saunders, CEO and co-founder of Vesper Healthcare adds, “This is a significant day for Vesper Healthcare and HydraFacial as we team up with a category-creating company in the emerging area of beauty health. Our goal is to build a premier company in beauty health, focused on providers such as estheticians and nurse practitioners, consumers, and partners and we believe that HydraFacial is the perfect platform to achieve this goal. HydraFacial possesses industry-leading consumer satisfaction scores and has presence in two high-growth categories within personal care – skincare and, more recently, hair care. We look forward to working with the HydraFacial team to create a valuable, industry-leading, global company in beauty health.”

Linden Managing Partner Brian Miller and Partner Kam Shah say, “We would like to thank the entire HydraFacial management team for driving extraordinary growth in the beauty health category. HydraFacial’s rapid transformation from a niche medical technology provider into a category-creator represents another great example of Linden’s differentiated Value Creation Program and Human Capital strategy in practice. As the largest individual shareholder going forward, Linden looks forward to providing continued partnership and support to the Company.”

More on the deal

The acquisition will be funded through a combination of cash in Vesper Healthcare’s trust account, proceeds from a common stock private placement led by premier institutional investors including Fidelity Management & Research Company, LLC, Redmile Group, LLC, Principal Global Investors, LLC, Camber Capital Management and Woodline Partners, LP and sellers’ rollover equity. HydraFacial expects to have a debt-free balance sheet at closing. Vesper Healthcare, Linden and DWHP will each retain an equity stake in the combined company.

The transaction, which has been unanimously approved by both Vesper Healthcare’s and HydraFacial’s boards of directors, is expected to close in the first half of 2021 and is subject to approval by Vesper Healthcare’s shareholders and other customary closing conditions, including any applicable regulatory approvals.

Goldman Sachs & Co. LLC is serving as an exclusive financial advisor and private placement agent and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Vesper Healthcare. Jefferies LLC is serving as Lead Financial Advisor, Piper Sandler is serving as Financial Advisor and Kirkland & Ellis LLP is acting as legal advisor to HydraFacial.