PROPOSED BUSINESS COMBINATION: HydraFacial
ENTERPRISE VALUE: $1.14 billion
ANTICIPATED SYMBOL: tbd
The HydraFacial® Company (“HydraFacial,” or the “Company”), and Vesper Healthcare Acquisition Corp. (NASDAQ: VSPR) (“Vesper Healthcare”), announced that they have entered into a definitive merger agreement pursuant to which HydraFacial and Vesper Healthcare will combine, and after which HydraFacial will become a public company. Upon completion of the transaction, the combined company expects to be listed on the NASDAQ exchange.
Headquartered in Long Beach, California, the HydraFacial Company has a 23-year history. The Company’s HydraFacial system offers an effective, experiential, non-invasive and accessible skin treatment experience. The HydraFacial signature treatment utilizes an innovative approach using a delivery system to provide, within approximately 30 minutes, a three-step experience to cleanse, extract and hydrate skin, offering an immediate outcome and an instantly gratifying glow. Treatments can be further customized to address individual skin concerns and needs with the use of a variety of specific booster serums.
In December of 2016, the Company was acquired by private equity firms Linden and DWHP. Since then, HydraFacial has generated compounded annual revenue growth of more than 50% through 2019. Overall, HydraFacial currently has over 15,000 delivery systems in more than 87 countries globally with the HydraFacial and Perk™ products. In 2019, 3.2 million HydraFacial treatments were performed worldwide.
Under the terms of the definitive merger agreement, 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. The acquisition will be funded through a combination of cash in Vesper Healthcare’s trust account, proceeds from a common stock PIPE transaction and sellers’ rollover equity. HydraFacial expects to have a debt free balance sheet at closing. Linden and DWHP will retain a combined 25% equity stake in the company.
Cash consideration, together with certain contractual fee payments, will be subject to a maximum of 60% of the aggregate Merger Consideration. The remainder of the Merger Consideration will be paid in a number of shares of newly issued Class A common stock of the Company valued at $10.00 per share.
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.
NOTABLE CONDITIONS TO CLOSE
- Availability of at least an aggregate of $390 million in cash at the Closing, including funds from the Company’s trust account and proceeds from the PIPE Transaction
NOTABLE CONDITIONS TO TERMINATION
- The Merger Agreement may be terminated at any time prior to the consummation of the Mergers by mutual written consent of the Company and HydraFacial and in certain other circumstances, including if the transactions have not been consummated by June 8, 2021, or a later date if extended pursuant to the terms of the Merger Agreement, and the delay of the Closing beyond such date is not due to the breach of the Merger Agreement by the party seeking to terminate.
- PIPE Investors have agreed to purchase an aggregate of 35,000,000 shares of Company Common Stock in a private placement for $10.00 per share, for a total of $350 million. The proceeds from the Private Placement will be used to partially fund the cash consideration to be paid to the stockholders of HydraFacial at the Closing. Participants in the PIPE include
- Fidelity Management & Research Company, LLC
- Redmile Group, LLC
- Principal Global Investors, LLC
- Camber Capital Management
- Woodline Partners, LP
- LCP and DW Healthcare Partners IV (B), L.P., a Delaware limited partnership and a minority stockholder of HydraFacial will agree, subject to limited exceptions, not to transfer such shares for a period of 180 days following the Closing.
- BLS Investor Group, (Vesper’s sponsor) will be required not to transfer their Founder Shares or the Company Common Stock issued upon conversion thereof for a period of one year following the Closing, unless:
- (i) the closing price of the Company Common Stock equals or exceeds $12.00 per share for 20 days out of any 30-trading-day period commencing at least 150 days following the Closing or;
- (ii) the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Company Common Stock for cash, securities or other property
- Goldman Sachs & Co. LLC is serving as an exclusive financial advisor and private placement agent to Vesper Healthcare
- Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Vesper Healthcare
- Jefferies LLC is serving as Lead Financial Advisor, and Piper Sandler is serving as Financial Advisor to HydraFacial
- Kirkland & Ellis LLP is acting as legal advisor HydraFacial
VESPER HEALTHCARE ACQUISITION CORPORATION MANAGEMENT & BOARD
Brenton L. Saunders, 50
President, Chief Executive Officer and Chairman
Mr. Saunders has over 25 years of experience in various aspects of healthcare and has been in leadership roles at several prominent global pharmaceutical and healthcare companies. Until May 2020, when it was acquired by AbbVie Inc. (NYSE: ABBV), Mr. Saunders served as Chairman, President and Chief Executive Officer of Allergan plc (“Allergan”). His role as President and Chief Executive Officer of Allergan began in July 2014 and his added role of Chairman began in October 2016. Mr. Saunders started his senior leadership roles in pharmaceuticals and healthcare sectors in 2003, as a member of the executive management team at Schering-Plough Corporation (“Schering-Plough”), where he held several key roles, including President of the company’s Global Consumer Health Care division. From March 2010 until August 2013, Mr. Saunders served as Chief Executive Officers of Bausch + Lomb Incorporated (NYSE: BHC), a leading global eye health company, until its acquisition by Valeant in 2013. He then became the Chief Executive Officer of Forest Laboratories Inc., a role he held until the company’s merger with Actavis Plc (“Actavis”) in 2014. Following the merger with Actavis, Mr. Saunders was named Chief Executive Officer of the combined business. In 2015, he led Actavis’ acquisition of Allergan. Before joining Schering-Plough in 2003 to begin his career in the pharmaceuticals and healthcare space, Mr. Saunders was a Partner and Head of Compliance Business Advisory at PricewaterhouseCoopers LLP. Prior to that, he was Chief Risk Officer at Coventry Health Care, Inc. (NYSE:CVH) and Senior Vice President, Compliance, Legal and Regulatory at Home Care Corporation of America. Mr. Saunders began his career as Chief Compliance Officer for the Thomas Jefferson University Health System. Additionally, Mr. Saunders currently serves as a director of Cisco Systems, Inc. (NASDAQ: CSCO), a global telecommunications company and BridgeBio Pharma Inc. (NASDAQ:BBIO), a biopharmaceutical company. He is also a member of The Business Council. Mr. Saunders holds a Bachelor of Arts degree from the University of Pittsburgh, a Juris Doctor degree from the Temple University School of Law, and an MBA from the Temple University School of Business.
Dr. Manisha Narasimhan, 44
Chief Financial Officer and Director
Dr. Narasimhan has over fifteen years of experience working with leading pharmaceutical and biotechnology companies. Dr. Narasimhan joined Allergan in December 2018 and most recently served as Senior Vice President of Strategic Initiatives, Portfolio Innovation and Investor Relations from August 2019 to May 2020. Prior to joining Allergan, Dr. Narasimhan worked at Regeneron Pharmaceuticals (NASDAQ:REGN) from September 2011 to November 2018, where she was an Executive Director and led the investor relations group. Prior to joining Regeneron, Dr. Narasimhan was an equity research analyst covering biotechnology at Canaccord Genuity from 2009 to 2011, and at Piper Jaffray from 2008 to 2009. Dr. Narasimhan began her career as a strategy consultant for pharmaceutical and biotechnology companies at Campbell Alliance Group Inc. from 2006 to 2008. Dr. Narasimhan received her Ph.D in molecular biology from New York University. Additionally, Dr. Narasimhan has served on the Board of Directors for Cytonus Therapeutics Inc, a privately held biotechnology company since March 2020.
Board of Directors
Michael D. Capellas, 66
Mr. Capellas has been a member of the Board of Directors of Cisco Systems, Inc. since January 2006 and currently serves Cisco as lead independent director. He has served as founder and Chief Executive Officer of Capellas Partners since November 2012. He served as Chairman of the Board of VCE Company, LLC from January 2011 until November 2012 and as Chief Executive Officer of VCE from May 2010 to September 2011. Mr. Capellas was the Chairman and Chief Executive Officer of First Data Corporation from September 2007 to March 2010. From November 2002 to January 2006, he served as Chief Executive Officer of MCI, Inc. (“MCI”), previously WorldCom. From November 2002 to March 2004, he was also Chairman of the Board of WorldCom, and he continued to serve as a member of the board of directors of MCI until January 2006. Mr. Capellas left MCI as planned in early January 2006 upon its acquisition by Verizon Communications Inc. Previously, Mr. Capellas was President of Hewlett-Packard Company from May 2002 to November 2002. Before the merger of Hewlett-Packard and Compaq Computer Corporation in May 2002, Mr. Capellas was President and Chief Executive Officer of Compaq, a position he had held since July 1999, and Chairman of the Board of Compaq, a position he had held since September 2000. Mr. Capellas held earlier positions as Chief Information Officer and Chief Operating Officer of Compaq. Mr. Capellas also currently serves as the chairman of the board of directors of Flex Ltd. He previously served as the independent lead director of MuleSoft, Inc., ending in 2018.
Dr. Julius Few, 53
Dr. Few founded and has been Director of The Few Institute for Aesthetic Plastic Surgery since 2008. A board-certified plastic surgeon in private practice, Dr. Few is widely recognized for enhancing the aesthetic appearance of his patients and contributing to research in plastic surgery. He is called upon by regulatory agencies, professional associations and international study bodies to share his expertise on surgical techniques and skin care innovations. Dr. Few can be seen across leading media channels including CBS News, ABC News, 20 20, Good Morning America, CNN, NBC News, The Wall Street Journal, Crain’s Business, Health Magazine, The Chicago Sun Times, The Chicago Tribune, WEB MD and Washingtonian Magazine on cosmetic procedures and treatments. Dr. Few also serves as a Clinical Professor for the Division of Plastic Surgery at the University of Chicago as well as a Health Systems Clinician at Northwestern University. He is on the Board of Trustees of the Museum of Contemporary Art and is a founding member of the Common Ground Foundation. He is also the founder of the Few Initiative, a non-profit that aids disadvantaged youth. Dr. Few received his medical degree from the University of Chicago Pritzker School of Medicine and completed his residency in general surgery at the University of Michigan Medical Center, followed by plastic surgery training at Northwestern University. In addition, Dr. Few received special facial and eye cosmetic training in Honolulu, New York and Atlanta.
Barry S. Sternlicht, 59
Mr. Sternlicht has been Chairman of the Board of Starwood Property Trust, Inc. since 2009. He has also been Chairman of the Board and Chief Executive Officer of Starwood Capital Group, a privately-held global investment firm with over $60 billion in assets under management since 1991, and serves as Chairman and Chief Executive Officer of Starwood Capital Group Management, LLC, a registered investment advisor. Mr. Sternlicht has been Chairman of the Board of Starwood Real Estate Income Trust, Inc. since 2017. He is Founder and Chairman of SH Hotels & Resorts, a hotel management company that owns and manages the Baccarat Hotels & Resorts, 1 Hotels and Treehouse brands, and from 1995 until 2005 was Founder, Chairman and Chief Executive Officer of Starwood Hotels & Resorts Worldwide, Inc. Mr. Sternlicht is also the Chairman of Jaws Acquisition Corp., a publicly filed blank check company whose focus is to effect an initial business combination, not limited to a particular industry.