Waldencast’s $1.2 Billion Business Combination With Obagi and Milk Makeup

Skadden, Arps, Slate, Meagher & Flom represented Waldencast. Latham & Watkins, working alongside Conyers and Nixon Peabody, represented Obagi, and Goodwin Procter represented Milk Makeup in the transaction.

Waldencast Acquisition Corp., a special purpose acquisition company, has entered into definitive simultaneous business combination agreements with leading science-based, results-driven skin care brand Obagi and award-winning makeup and skin care brand Milk Makeup. The approximately $1.2 billion three-way transaction is a first step in Waldencast’s strategy to create a global best-in-class multi-brand beauty and wellness platform.

Under the terms of the definitive merger agreement, the transaction is valued at a proforma enterprise value of approximately $1.2 billion. The transaction will be funded by $345 million of IPO cash proceeds (subject to any redemptions); a fully committed $333 million Forward Purchase Agreement of which $160 million is provided by the sponsors (Waldencast Long-Term Capital LLC and Dynamo Master Fund); a fully committed $105 million PIPE priced at $10.00 per share; and $475 million of Seller rollover equity. Obagi’s and Milk Makeup’s existing shareholders are expected to hold equity of 20.5% and 14.9% respectively (without giving effect to any redemptions), in Waldencast.

Obagi is an industry-leading, advanced skin care line formulated with scientifically proven ingredients, refined with a legacy of 30 years’ experience. First known as leaders in the treatment of hyperpigmentation with the Obagi Nu-Derm® System, Obagi products are designed to restore skin’s natural radiance by visibly improving balance, tone and texture, and diminishing the appearance of premature aging, photodamage, skin discoloration, acne, and sun damage. 

Founded in 2016, Milk Makeup quickly became a cult-favorite among the beauty community for its values of self-expression and inclusion, captured by its signature Live Your Look, its innovative formulas and clean ingredients. The brand creates vegan, cruelty-free, clean formulas from its Milk Makeup HQ in Downtown NYC. Currently, Milk Makeup offers over 300 products through its US website, and its retail partners including Sephora in North America, Europe, the Middle East and Australia and Cult Beauty and Selfridges in the UK.

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. The Company 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.

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. Financo Raymond James was financial advisor to Milk Makeup. 

The Skadden team included M&A partners Maxim Mayer-Cesiano and Paul Schnell, counsel Demetrius Warrick and associate Jonathan Berger; Capital Markets partners Gregg Noel (Palo Alto/Los Angeles) and Michael Schwartz, and associate Jenna Godfrey (Washington, D.C.); Intellectual Property and Technology partner Bruce Goldner; Tax partners Victor Hollender and James Anderson (London); M&A and Capital Markets partner Edward Lam (Hong Kong); and Litigation counsel Avia Dunn (Washington, D.C.). All attorneys are based in New York unless otherwise noted.

Latham & Watkins represented Obagi in the transaction with a corporate team led by Orange County partner Scott Shean and Los Angeles partner Andrew Clark with associates Brian Umanoff, Trevor Yedoni, Nolan Fargo, and Jack McKay. Advice was also provided on capital markets matters by Orange County partner Shayne Kennedy and Bay Area partner Phillip Stoup; on compensation and benefits matters by Los Angeles partner Michelle Carpenter with associate Aaron Tso; on tax matters by Bay Area partner Katharine Moir with associate Alexander Farris; on finance matters by Los Angeles partner Mark Morris; on licensing and intellectual property matters by San Diego partner Steven Chinowsky, San Diego counsel Darryl Steensma and New York counsel Eliot Choy with associates Kathryn Parsons-Reponte and Michael Sweeney; on antitrust matters by Bay Area partner Joshua Holian and Washington, D.C. counsel Joseph Simei; and on healthcare regulatory matters by Washington, D.C. partner Elizabeth Richards, Paris partner Eveline Van Keymeulen and Bay Area counsels Heather Deixler and Betty Pang with associate Jeanne Fabre.

The Conyers team included Partner Matthew Stocker, Counsel Alex Davies and Associate Frank Farrell.

The Goodwin team was led by Anthony McCusker and Dan Espinoza.

Nixon Peabody’s core team that advised Obagi included David Cheng, chair and managing partner of the firm’s China and Asia-Pacific practice; partners Michael A. Smith (SPAC), Richard F. Langan, Jr. (Capital Markets), David R. Brown (Securities) and Jeremy J. Wolk (Licensing); and senior counsel Kenneth H. Silverberg (Tax)—all of the firm’s Corporate practice. The team also included partner Gordon L. Lang (Regulatory); associates Anthony V. Bova II and Brian Whittaker; Hong Kong-based associates Katrina Ho and William Tong; and Chinese legal consultant Kelly F. Xiang.


Involved fees earner: Alex Davies – Conyers Dill & Pearman; Frank Farrell – Conyers Dill & Pearman; Matthew Stocker – Conyers Dill & Pearman; Daniel Espinoza – Goodwin Procter; Anthony McCusker – Goodwin Procter; Michelle Carpenter – Latham & Watkins; Steven Chinowsky – Latham & Watkins; Eliot Choy – Latham & Watkins; Andrew Clark – Latham & Watkins; Heather Deixler – Latham & Watkins; Jeanne Fabre – Latham & Watkins; Nolan Fargo – Latham & Watkins; Alexander Farris – Latham & Watkins; Joshua Holian – Latham & Watkins; Shayne Kennedy – Latham & Watkins; Jack McKay – Latham & Watkins; Katharine Moir – Latham & Watkins; Mark Morris – Latham & Watkins; Betty Pang – Latham & Watkins; Kathryn Parsons-Reponte – Latham & Watkins; Elizabeth Richards – Latham & Watkins; Scott Shean – Latham & Watkins; Joseph Simei – Latham & Watkins; Darryl Steensma – Latham & Watkins; Phillip Stoup – Latham & Watkins; Michael Sweeney – Latham & Watkins; Aaron Tso – Latham & Watkins; Brian Umanoff – Latham & Watkins; Evelyne Van Keymeulen – Latham & Watkins; Trevor Yedoni – Latham & Watkins; Anthony Bova – Nixon Peabody LLP; David Brown – Nixon Peabody LLP; David Cheng – Nixon Peabody LLP; Katrina Ho – Nixon Peabody LLP; Gordon Lang – Nixon Peabody LLP; Richard Langan Jr. – Nixon Peabody LLP; Kenneth Silverberg – Nixon Peabody LLP; Michael Smith – Nixon Peabody LLP; William Tong – Nixon Peabody LLP; Brian Whittaker – Nixon Peabody LLP; Jeremy Wolk – Nixon Peabody LLP; Kelly Xiang – Nixon Peabody LLP; James Anderson – Skadden; Jonathan Berger – Skadden; Avia Dunn – Skadden; Jenna Godfrey – Skadden; Bruce Goldner – Skadden; Victor Hollender – Skadden; Edward Lam – Skadden; Maxim Mayer-Cesiano – Skadden; Gregg Noel – Skadden; Paul Schnell – Skadden; Michael Schwartz – Skadden; Demetrius Warrick – Skadden;

Law Firms: Conyers Dill & Pearman; Goodwin Procter; Latham & Watkins; Nixon Peabody LLP; Skadden;

Clients: Milk Makeup; Obagi; Waldencast Acquisition;