In a return to the beauty business, former Allergan CEO Brent Saunders sealed a $1.1 billion deal for a hot and trendy med spa facial company.
Saunders co-founded—and recently took public—Vesper Healthcare Acquisition, which is now snapping up HydraFacial with an expected close by mid-2021. The company is built on its proprietary and eponymous facial, a celeb-endorsed and popular beauty treatment described as a gentler alternative to microdermabrasion.
Vesper will pay $975 million at closing and up to $75 million in milestones pegged to future acquisitions. The deal will be funded with Vesper's current cash store, plus a private stock placement led by institutional investors such as Fidelity. HydraFacial will become a wholly-owned subsidiary of Vesper.
Saunders, a seasoned hand at M&A, has been in the hunt for a platform company since Vesper went public via a special purpose acquisition company (SPAC) in September. The public offering netted Vesper $400 million, with investors essentially buying into Saunders' track record—along with that of co-founder, CFO and former Allergan executive Manisha Narasimhan.
While SPACs allow two years to use that money for acquisitions, Vesper wasted no time nabbing its first deal in just over two months.
First, but definitely not last. The deal takes the “first steps towards building an enduring and significant company in beauty health,” Saunders said during a Wednesday investor call about the deal.
Saunders intends for Vesper to be a “real roll-up type of company” he told CNBC in October. Along with aesthetics, Vesper is targeting eye care, longevity and wellness categories.
It’s tempting to think Saunders may be looking to take on his former company Allergan, which is best known for its Botox injection, but boasts other aesthetics treatments as well. But he's repeatedly dismissed that idea. He told Bloomberg and CNBC he’s not looking to compete with his alma mater—now owned by AbbVie—and that there’s “plenty of room” for Vesper to co-exist with Allergan in the markets where he plans to invest.
That means similar aesthetics marketing tactics and a direct sales model. Wednesday's news release notes Vesper will drive growth for HydraFacial by improving aesthetician education, investing in sales and marketing, and beefing up its product roster.
While Saunders is right at home in medical aesthetics and eye care, he and Narasimhan also have plenty of merger and acquisition experience as well. Saunders was one of the most practiced M&A-oriented CEOs in pharma.
He most recently led Allergan through its $63 billion acquisition by AbbVie, but has overseen a handful of other major deals. In 2009, he was part of the executive management team at Schering-Plough when it merged with Merck. In 2013, as CEO of Bausch + Lomb, he engineered its acquisition by Valeant Pharmaceuticals (now known as Bausch Health).
Then, he stepped up to CEO at Forest Laboratories and quickly struck a 2014 merger deal with Actavis—and a year later, in that company's CEO seat, he led Actavis' merger with Allergan.