Exclusive: Bridgepoint Group to Acquire Obagi Medical

On Monday, UK investment firm Bridgepoint announced an agreement to acquire Obagi Medical from Waldencast for $460 million.

With the purchase, Bridgepoint is moving further into the clinical skincare space, one of beauty’s most-desirable and fastest-growing sectors. In 2023, it bought dermal filler and medical device maker Laboratoires Vivacy; a year later, it added dermatologist-backed line Roc to its portfolio. In conjunction with the Obagi purchase, Waldencast co-founders Michel Brousset and Hind Sebti will leave the conglomerate to lead Obaji and form a new strategic commercial partnership with another Bridgepoint portfolio company, dermal filler label Laboratoires Vivacy.

Waldencast, meanwhile, will remain a public company; Felipe Dutra, current chairman of the board, will lead the business in the interim. Milk Makeup will remain its only asset with president and co-founder Mazdack Rassi at the helm.

While fundamentally a different vehicle, Brousset said that Waldencast’s aim to build a next generation beauty business still holds.

“Our thesis has never wavered. From day one, Waldencast existed to build and scale purpose-driven brands and give them the platform to become the best versions of themselves,” Brousset exclusively told The Business of Beauty. “Selling Obagi and partnering with Bridgepoint to lead it into its next chapter isn’t a departure from that thesis, it’s the purest expression of it.”

In a release, Dutra said that Waldencast’s board “believes this transaction represents the best path forward for Waldencast and its shareholders,“ strengthening the company’s balance sheet and allowing for a stronger focus on Milk Makeup.

Waldencast went public in 2021 as a special purpose acquisition company and began trading a year later after acquiring Obagi and Milk Makeup in a $1.2 billion merger. While it purchased Novaestiq last July to add more injectable labels under the Obagi Medical name, the company announced a strategic review of its operations in August. Obagi and Milk Makeup were desirable labels, but out-of-stock issues and a reduced distribution network weighed heavily on the company’s performance. To address its balance sheet positioning, Waldencast sold the Obagi licence in Japan to Rohto Pharmaceuticals for $82.5 million last November. In March, it announced fiscal net revenue of $272 million, driven largely by Obagi.

Sources close to the company cited Waldencast’s debt structure and lack of liquidity as a drag on overall performance. As of market close on May 29, the conglomerate’s market capitalisation was just $157.7 million. With net sales of roughly $200 million, Obagi was far more valuable than the overall company. Beauty M&A activity remains slow, but more deals are expected in the doctor-backed skincare space.

A New Clinical Skincare Contender

With the combined capabilities of Obagi and Vivacy, Bridgepoint is narrowing the gap between consumer beauty and pharmaceuticals. In a release, Bridgepoint’s head of healthcare Fabrice Turcq hailed physician-dispensed skincare as “one of the fastest-growing segments of the dermatology and aesthetics market.”

As the demand for clinical skincare and doctor-backed brands has surged, businesses of all sizes are looking for the right opportunities to boost their portfolios. Only L’Oréal, the world’s largest beauty conglomerate, has successfully cornered this market. Beyond its dermatological brands Cerave, La Roche-Posay, Skinceuticals, SkinBetter and Medik8, it upped its stake in Galderma to 20 percent in December. Firms such as Estée Lauder, Puig or Coty have yet to round out their businesses aside from topical products. Meanwhile, pharma entities like Botox maker Allergan, owned by AbbVie, and Xeomin owner Merz Aesthetic do not market their injectable products with the savvy or directness of their beauty competitors, despite greater adoption by clients.

25 percent of Obagi’s business must be prescribed by a doctor (the remaining can be bought at a doctor’s office or via e-commerce), so it’s a natural evolution for the label to further attach itself to the non-surgical “tweakments” that consumers are already asking for. By leveraging Vivacy’s products — its Stylage hyaluronic acid filler, Novuma biostimulator, Rejuran PDRN skin-booster and Desiral intimate-area HA fillers — Bridgepoint will be able to offer the professional channel a greater choice of products, much like L’Oréal.

“Beauty, aesthetics, wellness and longevity used to be four separate conversations; they’re collapsing into one,” Brousset said. “The consumer no longer distinguishes between looking well, feeling well and living longer — they want all of it. That convergence is the single biggest opportunity in our industry, and it’s the lens through which we see everything we build.”

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