The HydraFacial IPO is coming to the market in a deal that values the company at $1.1 billion. As it’s a leader in its industry, investors are interested in HydraFacial stock.

But is HydraFacial a good investment opportunity? Here’s what we know…

HydraFacial IPO: The Business

The HydraFacial IPO brings stock of the leading beauty health company to market.

HydraFacial is a beauty health company. It provides a platform and technology to both providers and consumers for a facial treatment. It can be used for medical, beauty or relaxing purposes. The idea is to personalize skincare for everyone, and HydraFacial helped create the beauty health category. The company’s products are available in 87 countries with more than 15,000 delivery systems. In 2019, 3.2 million HydraFacial treatments were performed worldwide.

In 2016, HydraFacial was acquired by Linden Capital Partners and DW Healthcare Partners (DWHP). The company claims it generated compounded annual revenue growth of more than 50% since then through 2019. And now, the company has announced a HydraFacial IPO. However, HydraFacial stock isn’t coming the traditional way.

HydraFacial Stock: SPAC IPO

HydraFacial announced the company is going public via a SPAC IPO with Vesper Healthcare Acquisition. A SPAC is a special-purpose acquisition company that raises money in an IPO. It then uses the funds to acquire a company, such as HydraFacial. SPAC investing became a popular trend in 2020 and continues to see an increase in popularity.

Vesper’s CEO is Brent Saunders. Saunders was the CEO of Allergan and left the company in May 2020 when it was purchased by AbbVie. Saunders has experience in the industry, having worked with brands such as Botox Cosmetic, Dr. Scholl’s and Coppertone.

In HydraFacial’s press release, Saunders commented…

This is a significant day for Vesper Healthcare and HydraFacial as we team up with a category-creating company in the emerging area of beauty health. Our goal is to build a premier company in beauty health, focused on providers such as estheticians and nurse practitioners, consumers, and partners and we believe that HydraFacial is the perfect platform to achieve this goal. HydraFacial possesses industry-leading consumer satisfaction scores and has presence in two high-growth categories within personal care – skincare and, more recently, hair care. We look forward to working with the HydraFacial team to create a valuable, industry-leading, global company in beauty health.

HydraFacial is also excited about the opportunities the SPAC IPO presents to the company. CEO Clint Carnell commented…

Our goal at HydraFacial has been to create an incredible experience that is effective, democratized, and personalized, for men and women of all ages and skin types. Our HydraFacial technology does just that, which has led to exceptional loyalty and satisfaction from estheticians and consumers alike. Our treatments provide immediate and noticeable results to consumers, and a strong return on investment for providers. We have a proven track record of growth in a large and growing market, we have developed a critical mass globally with over 15,000 delivery systems in operation and our business model provides us with a recurring revenue stream in consumables. This, along with favorable demographic trends, supported by our experienced team which has been made even stronger by combining with Vesper Healthcare, has created a business model that we believe is well positioned to deliver sustained long-term growth. We plan to leverage our infrastructure to bring to market additional innovative products backed by powerful technology.

So before we get into the details of the HydraFacial IPO, let’s look at the company’s product.

The HydraFacial Treatment and Products

The HydraFacial treatment is a 30-minute, three-step process. It’s a hydra-dermabrasion treatment. It exfoliates and extracts impurities while pushing serums into the healthy underlying skin. The process addresses multiple skin concerns for all skin types.

Hydra-dermabrasion can help with…

  • Early aging lines and wrinkles
  • Hydration
  • Enlarged pores
  • Blackheads and whiteheads
  • Excess oil
  • Overall skin health.

HydraFacial uses its patented Vortex-Fusion technology. The product creates a vortex effect to remove impurities while hydrating the skin at the same time. HydraFacial’s three steps are…

  1. Cleanse and Peel. The first step in the process is to gently remove the dead skin to reveal a new layer of healthy skin.
  2. Extract and Hydrate. Once the dead skin is removed, suction is used to clear pores of debris such as dirt and oil. The skin is then moisturized.
  3. Fuse and Protect. The last step is to provide antioxidants and peptides for healthy, glowing skin.

The company also has a quiz online to discover your skin health score. By answering questions about your habits and skin, HydraFacial determines what you can do to improve your skin’s health and what process and products they recommend.

During the COVID-19 pandemic, the company’s operations shut down. However, Carnell claims that demand has already bounced back, and HydraFacial is on the path to $115 million in revenue for 2020 with a projected estimate of $180 million in 2021.

With that in mind, here are the details for the HydraFacial IPO and when investors can expect to see HydraFacial stock.

HydraFacial SPAC IPO Details

The transaction values HydraFacial at $1.1 billion. It consists of $975 million payable at closing and up to $75 million payable upon completion of identified acquisitions by the combined company. Institutional investors such as Fidelity Management & Research, Redmile Group and Principal Global Investors will help fund the acquisition through a private investment in public equity (PIPE). Vesper will put $100 million toward HydraFacial’s balance sheet for acquisitions, debt and giving existing shareholders up to $415 million.

Investors expect the HydraFacial SPAC IPO to be completed in the first half of 2021. It’s waiting to be approved by existing shareholders.

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Investors won’t see HydraFacial stock until the new year. But as a household name in its industry, it’s likely the HydraFacial IPO will make a smooth market debut.