Founders and stakeholders looking to cash in on the thriving beauty brands they have built have a new exit option to consider: selling to a SPAC, Vogue Business reports.
A SPAC presents an alternative to the usually bifurcated beauty exit path of either a strategic sale to a bigger business or private investment by allowing companies to become publicly listed without undergoing the traditional IPO process.
“For particular businesses at the right time in their growth trajectories, selling to a SPAC can be a lucrative exit strategy,” says Marissa Lepor, vice president at investment bank The Sage Group. “As such, SPACs have received a lot of hype in the market, but it’s important to evaluate each opportunity individually.”
Telemedicine wellness company Hims & Hers went public via a $1.6 billion SPAC in 2021, as did beauty health company HydraFacial through a SPAC led by former Allergan CEO Brent Saunders, giving the company an enterprise value of $1.1 billion. In November 2021, scientific skincare line Obagi and cosmetics company Milk Makeup were acquired in a three-way deal by Waldencast Acquisition Company, which valued the combined business at $1.2 billion. Waldencast is led by CEO and former L’Oréal executive Michel Brousset. Read more.
