Sunday, May 19, 2024

Milk Makeup Joins Sustainable Beauty SPAC: ‘We Are Trying to Build a Next-Generation Company’


In the first of its acquisitions, the Waldencast Acquisition Corp.—a sustainable beauty-focused SPAC—has acquired vegan makeup brand Milk Makeup and clinical skincare brand Obagi.

A new SPAC (special-purpose acquisition company) helmed by two former L’Oréal executives is merging with Milk Makeup and Obagi in a deal valued at more than $1.2 billion aimed at sustainability and inclusivity.

The SPAC, Waldencast Acquisition Corp., will operate as Waldencast. It is led by founders Michel Brousset, former group president of L’Oréal North America Consumer Products, and Hind Sebti, who has worked at L’Oréal and Procter & Gamble Co. Brousset will serve as CEO and Sebti as COO.

Obagi CEO Jaime Castle and Milk Makeup CEO Tim Coolican will remain at the helm of their brands, reporting to Brousset. Waldencast says it will also acquire other smaller “purpose-driven” beauty and wellness brands.

The acquisition will be funded by $345 million in cash from the SPAC’s IPO, only as long as investors don’t redeem their SPAC shares. The company is raising additional funds including $160 million in sponsor capital as well as a private investment in public equity, or PIPE. There’s also an additional $475 million in the postdeal valuation based on the equity of both of the merging companies.


“Partnering with Obagi and Milk Makeup is a major milestone in our ambition to build a best-in-class global multi-brand beauty platform, which will be home for the next generation of high-growth, purpose-driven brands, “Brousset said.

“I greatly admire Obagi and Milk Makeup, both leaders in their respective categories, and I am looking forward to working with Jaime and Tim to further accelerate the growth of their respective brands, while preserving each brand’s unique business model. We believe the brands will benefit strongly from the Waldencast ecosystem, bringing operational scale, and attracting best-in-class talent and capabilities,” he said.

Image courtesy Milk Makeup

The announcement comes after Waldencast went public in March (WALD); it has a market value of more than $400 million.

According to Brousset, the founders envisioned the company several years ago—but it was initially created to invest in startup beauty brands, not as a SPAC.

“Three years ago I didn’t even know what a SPAC was,” Brousset said. The decision came to allow for rapid fundraising and speed acquisitions.

SPACs raise money and list on stock exchanges in order to merge with private companies. Once the mergers are complete, the private companies replace the SPACs on the stock markets.

Milk Makeup

Milk Makeup launched in 2014. But it has quickly become a leader in clean ingredient-focused, vegan cosmetics. It’s built around a three-pronged ethos: Good for You, Good for the Planet, and Good for the Community–values that resonate with its predominantly Gen-Z shoppers. The acquisition will help the label expand its portfolio and global reach.

Image courtesy Milk Makeup

“Our community has always been the heartbeat of our company and Milk Makeup’s mission is to celebrate and serve them. We found in Waldencast like-minded partners who share our values and commitment to building a global beauty movement rooted in community, self-expression, inclusion, and social purpose,” Coolican said.

“We built Milk Makeup to be a movement as much as a business, and Waldencast is the perfect home for Milk Makeup to achieve its full potential,” said Mazdack Rassi, Milk Makeup co-founder and Chief Brand Officer. “I am so grateful to our team and our community and look forward to a great future together.”


Obagi is at the forefront of the highest-growth skincare category: doctor-dispensed cosmetics. It is ranked number one by dermatologists and plastic surgeons with a science-backed approach to skin health.

“Waldencast’s ambition to build a global best-in-class beauty and wellness company that embraces conscious, purpose-driven brands is aligned with Obagi’s purpose, vision, and values, making Waldencast an ideal fit,” said Castle.

Image courtesy Obagi

“I look forward to working with Michel and the team as we continue to develop effective, science-based skincare that includes and embraces the full spectrum of beauty and self-care.”

Waldencast is sure to have competition in the clean and sustainable beauty space, namely from Brousset and Sebti’s former employer, L’Oréal.

L’Oréal’s sustainability initiatives

Nearly all of the ingredients in French cosmetic giant L’Oréal’s products will come from renewable resources by 2030, the company said earlier this year. The L’Oréal Group, which has already invested more than $1 billion into sustainability targets, says it is prioritizing “green science” as the way forward. The L’Oréal Group encompasses 35 brands across the globe and generated more than $30 billion in sales last year.

L’Oréal says that while 80 percent of its raw materials last year were biodegradable and 59 percent were renewable, less than 35 percent were natural. Only 29 percent were developed with “green chemistry” — a process created by Yale scientist Paul Anastas. Now, the company says its goal moving forward emphasizes plants; 95 percent of all ingredients will be plant-based by 2030.

Image courtesy L’Oréal

“Sustainability is an imperative now more than ever, and it is our role to allow consumers to make educated choices,” incoming deputy CEO Nicolas Hieronimus told Vogue Business in March.

According to the company, some ingredients prove difficult to replace with sustainable alternatives including UV filters, hair dyes, long-wear products, and silicone-like sensorial textures. They’re predominantly byproducts of petrochemicals.

The company is also looking at biotechnology such as gene-editing complex ingredients. Its green tech also helps to reduce waste products in the production cycle.

L’Oréal is also prioritizing consumer education around its products with a new website, Inside Our Products. There, the brand provides information on nearly 1,000 of its products.

The company created a consumer-facing ranking system that scores the brand’s products on 14 sustainability criteria that are independently verified. The ratings, which will appear on all rinse-off products by 2022, rank from “A” to “E” grades including greenhouse gas emissions, water scarcity, ocean acidification, and impact on biodiversity.

For Waldencast, the focus isn’t on the competition, though. It’s too busy on the task at hand, according to Brousset. “We are trying to build a next-generation company that values sustainability, responsibility, and inclusivity.”


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