/s/ Felipe Dutra | | | |
Felipe Dutra Executive Chairman | | |
• | Proposal No. 1(a) — The Obagi Merger Proposal — to consider and vote upon a proposal to approve by ordinary resolution and adopt the Agreement and Plan of Merger, dated as of November 15, 2021, by and among Waldencast, Obagi Merger Sub, Inc., a Cayman Islands exempted company limited by shares (“Merger Sub”), and Obagi Global Holdings Limited, a Cayman Islands exempted company limited by shares (“Obagi”), a copy of which is attached to this proxy statement/prospectus statement as Annex A (as may be amended from time to time, the “Obagi Merger Agreement”). The Obagi Merger Agreement provides, among other things, for the merger of Merger Sub with and into Obagi (the “Obagi Merger”), with Obagi surviving the Obagi Merger as a wholly owned subsidiary of Holdco 2 and an indirect wholly owned subsidiary of Waldencast plc, in accordance with the terms and subject to the conditions of the Obagi Merger Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Obagi Merger Proposal”); |
• | Proposal No. 1(b) — The Milk Transaction Proposal — to consider and vote upon a proposal to approve by ordinary resolution and adopt the Equity Purchase Agreement, dated as of November 15, 2021, by and among Waldencast, Obagi Holdco 1 Limited, a limited company incorporated under the laws of Jersey (“Holdco 1”), Waldencast Partners LP, a Cayman Islands exempted limited partnership (“Waldencast LP” and together with Holdco 1, the “Milk Purchasers”), Milk, the members of Milk (the “Milk Members”) and Shareholder Representative Services, LLC, a Colorado limited liability company, solely in its capacity as representative, agent and attorney-in-fact of the Milk Members (the “Equityholder Representative”), a copy of which is attached to this proxy statement/prospectus as Annex B (as may be amended from time to time, the “Milk Equity Purchase Agreement”). The Milk Equity Purchase Agreement provides, among other things, for the purchase of all of the issued and outstanding membership interests of Milk by the Milk Purchasers (the “Milk Transaction”), in accordance with the terms and subject to the conditions of the Milk Equity Purchase Agreement as more fully described elsewhere in this proxy statement/prospectus (the “Milk Transaction Proposal” and together with the Obagi Merger Proposal, the “BCA Proposal”); |
• | Proposal No. 2 — The Domestication Proposal — to consider and vote upon a proposal to approve by special resolution, the change of Waldencast’s jurisdiction of incorporation by deregistering as an exempted company in the Cayman Islands and continuing and domesticating as a public limited company under the laws of Jersey (the “Domestication” and, together with the Obagi Merger and Milk Transaction, the “Business Combination”) (the “Domestication Proposal”); |
• | Organizational Documents Proposals — to consider and vote upon the following four separate proposals (collectively, the “Organizational Documents Proposals”) to approve by special resolution, in the case of Organizational Documents Proposals A and D, and by ordinary resolution in the case of Organizational Documents Proposals B and C, the following material differences between Waldencast’s Amended and Restated Memorandum and Articles of Association (as may be amended from time to time, the “Cayman Constitutional Documents”) and the proposed new memorandum and articles of association of Waldencast plc (a public limited company incorporated in Jersey following the Domestication) upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex G (the “Proposed Constitutional Document”), and the filing with and acceptance by the Registrar of Companies in Jersey of the Proposed Constitutional Document and accompanying documentation in accordance with Part 18C of the Companies (Jersey) Law 1991, as amended (“Jersey Companies Law”), and the change of name of Waldencast to “Waldencast plc” in connection with the Business Combination (Waldencast after the Domestication, including after such change of name, is referred to herein as “Waldencast plc”); |
(A) | Proposal No. 3 — Organizational Documents Proposal A — to authorize the change in the authorized share capital of Waldencast from 500,000,000 Class A ordinary shares, par value $0.0001 per share (the “Waldencast Class A ordinary |
(B) | Proposal No. 4 — Organizational Documents Proposal B — to provide that the board of directors of Waldencast plc (the “Waldencast plc Board”) be divided into three classes, with each class made up of, as nearly as may be possible, one-third of the total number of directors constituting the entire Waldencast plc Board, with only one class of directors being elected in each year and each class serving a three-year term (“Organizational Documents Proposal B”); |
(C) | Proposal No. 5 — Organizational Documents Proposal C — to provide that certain provisions of the Proposed Constitutional Document will be subject to the Investor Rights Agreement (as defined herein), including provisions governing the appointment, removal and replacement of directors, with respect to which Cedarwalk Skincare Ltd., a Cayman Islands exempted company limited by shares, will have certain rights pursuant to the Investor Rights Agreement (“Organizational Documents Proposal C”); |
(D) | Proposal No. 6 — Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of the Cayman Constitutional Documents with the Proposed Constitutional Document in connection with the consummation of the Business Combination (a copy of which is attached to this proxy statement/prospectus as Annex G), including (1) changing the corporate name from “Waldencast Acquisition Corp.” to “Waldencast plc,” (2) making Waldencast plc’s existence for an unlimited duration and (3) removing certain provisions related to Waldencast plc’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which Waldencast’s board of directors believes is necessary to adequately address the needs of Waldencast plc after the Business Combination (“Organizational Documents Proposal D”); |
• | Proposal No. 7 — The Director Election Proposal — to consider and vote upon a proposal to approve by ordinary resolution of the holders of Waldencast Class B ordinary shares, assuming the BCA Proposal, the Domestication Proposal and the Organizational Documents Proposals are approved, to elect nine directors who, upon consummation of the Business Combination, will be the directors of Waldencast plc (the “Director Election Proposal”); |
• | Proposal No. 8 — The Stock Issuance Proposal — to consider and vote upon a proposal to approve by ordinary resolution for purposes of complying with the applicable provisions of The Nasdaq Stock Market Listing Rule 5635, the issuance of (a) Waldencast plc Class A ordinary shares to the PIPE Investors (as defined herein) pursuant to the PIPE Investment (as defined herein) and the shareholders of Obagi (“Obagi Shareholders”) pursuant to the Obagi Merger Agreement and (b) units of Waldencast plc to each of Burwell Mountain PTC LLC, as the trustee of Burwell Mountain Trust, Dynamo Master Fund and Beauty Ventures LLC (the “Forward Purchasers”) pursuant to the Forward Purchase Transaction (as defined herein) (the “Stock Issuance Proposal”); |
• | Proposal No. 9 — The Milk Issuance Proposal – to consider and vote upon a proposal to approve by ordinary resolution the issuance of Waldencast plc Non-Economic ordinary shares and the reservation for issue of Waldencast plc Class A ordinary shares in exchange for Waldencast LP Common Units, in each case, to the Milk Members (the “Milk Issuance Proposal”); |
• | Proposal No. 10 — The Incentive Award Plan Proposal — to consider and vote upon a proposal to approve by ordinary resolution, the Waldencast plc 2022 Incentive Award Plan, which is the omnibus equity incentive plan of Waldencast plc (the “Incentive Award Plan Proposal”, and together with the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal and the Milk Issuance Proposal, the “Condition Precedent Proposals”); and |
• | Proposal No. 11 — The Adjournment Proposal — to consider and vote upon a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting (the “Adjournment Proposal”). |
(i) | (a) hold public shares, or (b) hold public shares through units and you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
(ii) | submit a written request to Continental Stock Transfer & Trust Company (“Continental”), Waldencast’s transfer agent, that Waldencast plc redeem all or a portion of your public shares for cash; and |
(iii) | deliver your public shares to Continental, Waldencast’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”). |
/s/ Felipe Dutra | | | |
Felipe Dutra Executive Chairman | | |
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• | “affiliate” or “Affiliate” means, with respect to any specified Person, any Person that, directly or indirectly, controls, is controlled by, or is under common control with, such specified Person, whether through one or more intermediaries or otherwise. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; |
• | “Affiliate Agreements” means contracts (other than offer letters, employment agreements, bonus agreements, severance agreements, separation agreements, employee non-competition agreements, employee confidentiality and invention assignment agreements, non-competition agreements, separation agreements, or any other agreement entered into in the ordinary course or equity or incentive equity documents and Governing Documents) between Obagi and its subsidiaries, on the one hand, and Affiliates of Obagi or any of Obagi’s subsidiaries (other than Obagi Hong Kong, Clinactiv or any of their respective subsidiaries), the officers and managers (or equivalents) of Obagi or any of Obagi’s subsidiaries, the shareholders of Obagi or any of Obagi’s subsidiaries, any employee of Obagi or any of Obagi’s subsidiaries, a member of the immediate family of the foregoing Persons, or Obagi Hong Kong, Clinactiv or any of their respective subsidiaries; |
• | “Aggregate Fully Diluted Milk Common Units” means, without duplication, the aggregate number of shares of Milk Common Units that are (i) issued and outstanding immediately prior to the Milk Transaction Effective Time, (ii) issuable upon the exchange of Milk Preferred Units that are outstanding immediately prior to the Milk Transaction Effective Time, (iii) issuable upon the exercise of Milk Options and Milk UARs (whether or not then vested or exercisable) that are outstanding immediately prior to the Milk Transaction Effective Time and (iv) issuable upon the exercise of the Milk Warrants that are outstanding immediately prior to the Milk Transaction Effective Time; provided that any Milk Option and Milk UAR with an exercise or strike price, as applicable, equal to or greater than the Milk Per Unit Transaction Consideration shall not be counted for purposes of determining the number of Aggregate Fully Diluted Milk Common Units; |
• | “Aggregate Fully Diluted Obagi Common Shares” means, without duplication, (a) the aggregate number of shares of Obagi Common Stock that are (i) issued and outstanding immediately prior to the Obagi Merger Effective Time, or (ii) issuable upon the exercise of Obagi Options (whether or not then vested or exercisable) that are outstanding immediately prior to the Obagi Merger Effective Time or (iii) issuable upon the settlement of Obagi RSUs (whether or not then vested) that are outstanding immediately prior to the Obagi Merger Effective Time, minus (b) any shares of Obagi Common Stock held in the treasury of Obagi as of immediately prior to the Obagi Merger Effective Time; provided that any Obagi Option with an exercise price equal to or greater than the product obtained by multiplying (A) the Obagi Exchange Ratio by (B) $10.00 (the “Obagi Per Share Merger Consideration”) shall not be counted for purposes of determining the number of Aggregate Fully Diluted Obagi Common Shares; |
• | “Aggregate Milk Option Exercise Price” means the aggregate amount that would have been received by Milk if each Milk Option outstanding immediately prior to the Milk Transaction Effective Time had been exercised as of such time; |
• | “Aggregate Milk Transaction Consideration” means the Milk Equity Consideration plus the Milk Cash Consideration plus the Waldencast plc Non-Economic ordinary shares; |
• | “Aggregate Milk UAR Strike Price” means the aggregate grant date fair market value of shares subject to the Milk UARs; |
• | “Aggregate Milk Warrant Exercise Price” means the aggregate amount that would have been received by Milk if each Milk Warrant outstanding immediately prior to the Milk Transaction Effective Time had been exercised as of such time; |
• | “Aggregate Obagi Option Exercise Price” means the aggregate amount that would have been received by Obagi if each Obagi Option outstanding immediately prior to the Obagi Merger Effective Time had been exercised as of such time; |
• | “Amended and Restated Waldencast Partners LP Agreement” means the amended and restated limited partnership agreement of Waldencast LP; |
• | “Antitrust Authorities” means the Antitrust Division of the U.S. Department of Justice, the U.S. Federal Trade Commission or the antitrust or competition law authorities of any other jurisdiction (whether the U.S., foreign or multinational); |
• | “Beauty FPA Investor” means the Sponsor, in its capacity as managing member of Beauty Ventures; |
• | “Beauty Ventures” means Beauty Ventures LLC, which is managed by the Sponsor; |
• | “Business Combination” means the Obagi Merger, the Milk Transaction and the Domestication; |
• | “CAGR” means compound annual growth rate; |
• | “Cayman Constitutional Documents” means Waldencast’s amended and restated memorandum and articles of association (as the same may be amended from time to time as permitted hereby prior to the Domestication); |
• | “Cayman Islands Companies Act” means the Cayman Islands Companies Act (As Revised); |
• | “Cayman Registrar” means the Cayman Registrar of Companies under the Companies Act (As Revised) of the Cayman Islands; |
• | “Cedarwalk” means Cedarwalk Skincare Ltd., a Cayman Islands exempted company limited by shares; |
• | “cGMP” means current good manufacturing practices; |
• | “China Region” means the People’s Republic of China, inclusive of the Hong Kong Special Administrative Region, the Macau Special Administrative Region, and Taiwan; |
• | “Clinactiv” means Clinactiv Technology Limited, a Cayman Islands exempted company limited by shares; |
• | “Clinactiv Consent” means any consent required under the Obagi Existing Credit Agreement in order for Obagi to consummate the Clinactiv Distribution without causing an event of default or mandatory prepayment event occurring thereunder; |
• | “Clinactiv Distribution” means the distribution of all of the outstanding equity interests of Clinactiv to Cedarwalk in accordance with a distribution agreement in a customary form by and among Obagi, Cedarwalk and Waldencast; |
• | “Closing” means the Milk Closing and the Obagi Closing, together; |
• | “Closing Date” means the Obagi Closing Date and the Milk Closing Date, together; |
• | “Code” means the U.S. Internal Revenue Code of 1986, as amended; |
• | “Conditional Consent” means that certain Conditional Consent, Waiver and Acknowledgement, dated as of June 13, 2022, by and among Waldencast, Merger Sub, Obagi Cosmeceuticals, Obagi, Obagi Hong Kong and Cedarwalk; |
• | “Condition Precedent Proposals” means, collectively, the BCA Proposal, the Domestication Proposal, the Organizational Documents Proposals, the Director Election Proposal, the Stock Issuance Proposal, the Milk Issuance Proposal and the Incentive Award Plan Proposal; |
• | “Continental” means Continental Stock Transfer & Trust Company; |
• | “contracts” means all legally binding contracts, agreements, arrangements or undertakings (including memorandums of understanding and letters of understanding), subcontracts, leases, licenses, subleases, deeds, commitments, mortgages, purchase orders, work orders, task orders and guaranties, in each case, whether written or oral; |
• | “COVID-19” means SARS-CoV-2 or COVID-19, and any evolutions or mutations thereof or related or associated epidemics, pandemics or disease outbreaks; |
• | “Dai Family” means Yumin Dai, Sijue (Steven) Dai, Sicong (Simon) Dai, any of their spouses, lineal descendants or ancestors, and the respective heirs, executors and controlled investment affiliates of each of the foregoing; |
• | “Distribution Agreements” means the distribution agreement between Obagi Holdings and Obagi, and the distribution agreement between Obagi and Cedarwalk, in each case, pursuant to the Obagi China Distribution; |
• | “Dollars” or “$” means lawful money of the U.S.; |
• | “Domestication” means the domestication by way of continuance of Waldencast as a Jersey public limited company and deregistration in the Cayman Islands in accordance with Part 18C of the Jersey Companies Law and the Cayman Islands Companies Act; |
• | “DTC” means The Depository Trust Company; |
• | “Equityholder Representative” means Shareholder Representative Services LLC, a Colorado limited liability company; |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended; |
• | “Financing Expenses” has the meaning specified in the definition of Waldencast Transaction Expenses; |
• | “Forward Purchaser” means each of Burwell Mountain Trust, Dynamo Master Fund, and Beauty Ventures; |
• | “Forward Purchase Agreements” or “FPAs” means the Third-Party Forward Purchase Agreement and the Sponsor Forward Purchase Agreement, together; |
• | “Forward Purchase Amount” means $333.0 million; |
• | “Forward Purchase Transaction” means the transactions pursuant to the Third-Party Forward Purchase Agreement and the Sponsor Forward Purchase Agreement, together; |
• | “founder shares” means the Waldencast Class B ordinary shares purchased by the Sponsor in a private placement prior to the initial public offering, and the Waldencast Class A ordinary shares that will be issued upon the conversion thereof; |
• | “GAAP” means generally accepted accounting principles in the U.S.; |
• | “Governing Documents” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs. For example, the “Governing Documents” of a corporation are its certificate of incorporation and by-laws, the “Governing Documents” of a limited partnership are its limited partnership agreement and certificate of limited partnership, the “Governing Documents” of a limited liability company are its operating agreement and certificate of formation, the “Governing Documents” of an exempted company are its memorandum and articles of association and the “Governing Documents” of a Jersey company are its memorandum and articles of association; |
• | “Governmental Authority” means any federal, state, provincial, municipal, local or foreign government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, court or tribunal, or arbitrator; |
• | “Governmental Order” means any order, judgment, injunction, decree, writ, stipulation, determination or award entered by or with any Governmental Authority; |
• | “Holdco 1” means Obagi Holdco 1 Limited, a private limited company incorporated under the laws of Jersey; |
• | “Holdco 2” means Obagi Holdco 2 Limited, a private limited company incorporated under the laws of Jersey; |
• | “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder; |
• | “indebtedness” means with respect to any Person, without duplication, any obligations, contingent or otherwise, in respect of (a) the principal of and premium (if any) in respect of any indebtedness for borrowed money, including accrued interest and any per diem interest accruals or cost associated with prepaying any such indebtedness solely to the extent such indebtedness is prepaid, (b) amounts drawn on letters of credit, bank guarantees, bankers’ acceptances and other similar instruments (solely to the extent such amounts have actually been drawn), (c) the principal of and premium (if any) in respect of obligations evidenced by bonds, debentures, notes and similar instruments, (d) the termination value of interest rate protection agreements and currency obligation swaps, hedges or similar arrangements (without duplication of other indebtedness supported or guaranteed thereby), (e) obligations to pay the deferred and unpaid purchase price of property and equipment that have been delivered, including “earn outs” and “seller notes,” (f) any unpaid interest, premiums, breakage costs, prepayment or early termination premiums, penalties, or other fees, costs or expenses payable, including as a result of the consummation of the transactions contemplated hereby in respect of any of the items in the foregoing clauses (a) through (f), and (g) all indebtedness of another Person referred to in clauses (a) through (f) above guaranteed directly or indirectly, jointly or severally, by a Person or any of its subsidiaries; |
• | “Initial PIPE Investment” means the purchase of Waldencast plc Class A ordinary shares pursuant to the Initial Subscription Agreements; |
• | “Initial PIPE Investors” means those certain investors participating in the purchase of shares of Waldencast plc pursuant to the Initial Subscription Agreements; |
• | “initial public offering” means Waldencast’s initial public offering that was consummated on March 18, 2021; |
• | “Initial Subscription Agreements” means the subscription agreements executed on or prior to November 14, 2021, pursuant to which the Initial PIPE Investment will be consummated; |
• | “Inventory Cash Value” means the value of and cost associated with inventory on hand as of five business days prior to the extraordinary general meeting and acquired by Obagi Cosmeceuticals on behalf and for the benefit of Obagi Hong Kong and its Subsidiaries, that has not been paid for by Obagi Hong Kong; |
• | “Investor Directors” means Sarah Brown, Juliette Hickman, Lindsay Pattison and Zach Werner; |
• | “Investor Rights Agreement” means the Investor Rights Agreement, to be entered into by and among Waldencast, Cedarwalk, the Sponsor and the guarantor of Cedarwalk’s obligations thereunder; |
• | “IP License Agreement” means the intellectual property license agreement, and side letter to the same agreement, to be entered by and among Obagi China Distribution, Obagi Worldwide and Obagi Hong Kong; |
• | “IPO Registration Statement” means the Registration Statement on Form S-1 (333-253370) filed by Waldencast in connection with its initial public offering, which became effective on March 15, 2021; |
• | “IRS” means the U.S. Internal Revenue Service; |
• | “Jersey Companies Law” means the Companies (Jersey) Law 1991, as amended; |
• | “Jersey Registrar” means the Registrar of Companies in Jersey under the Jersey Companies Law; |
• | “JOBS Act” means the Jumpstart Our Business Startups Act of 2012; |
• | “Letter Agreement” means that Letter Agreement, dated as of March 15, 2021, by and among Waldencast, the Sponsor and certain other shareholders of Waldencast; |
• | “Lock-Up Agreements” means the Obagi Lock-Up Agreement and the Milk Lock-Up Agreement, together; |
• | “Merger Sub” means Obagi Merger Sub, Inc., a Cayman Islands exempted company limited by shares; |
• | “Milk” means Milk Makeup LLC, a Delaware limited liability company; |
• | “Milk Appreciation Rights Plan” means the Milk Makeup LLC Appreciation Rights Plan; |
• | “Milk Award” means a Milk Option or a Milk UAR; |
• | “Milk Cash Consideration” means an amount equal to $140.0 million, minus the Milk Cash Consideration Reduction Amount, if any, minus $2.5 million, minus $0.05 million, to the extent actually paid at Closing; provided that in no event will the Milk Cash Consideration equal less than zero dollars ($0.00); |
• | “Milk Cash Consideration Reduction Amount” means: |
(a) | if the Milk Closing Available Cash is equal to or greater than $630.0 million, an amount equal to zero dollars ($0.00); or |
(b) | if the Milk Closing Available Cash is less than $630.0 million and greater than $615.0 million, an amount equal to (i) $630.0 million minus (ii) the Milk Closing Available Cash; or |
(c) | if the Milk Closing Available Cash is equal to or less than $615.0 million and greater than $565.0 million, an amount equal to (i) $15.0 million, plus (ii) 25% of the amount equal to (A) $615.0 million, minus (B) the Milk Closing Available Cash; or |
(d) | if the Milk Closing Available Cash is equal to or less than $565.0 million, an amount equal to (i) $27.5 million, plus (ii) 50% of the amount equal to (A) $565.0 million, minus (B) the Milk Closing Available Cash; provided, however, that under no circumstance shall the Milk Cash Consideration Reduction Amount be negative; |
• | “Milk Closing” means the closing of the transactions contemplated by the Milk Equity Purchase Agreement; |
• | “Milk Closing Available Cash” means the sum of (w) the cash remaining in the Trust Account (after giving effect to the Waldencast/Milk Share Redemptions (if any)), plus (x) the PIPE Investment Amount actually received by Waldencast prior to or substantially concurrently with the Closing, plus (y) the Forward Purchase Amount actually received by Waldencast prior to or substantially concurrently with the Milk Closing, plus (z) the cash and cash equivalents of Waldencast, Milk and Obagi and their respective subsidiaries, including the proceeds of any indebtedness incurred after the date hereof (other than any indebtedness of up to $125.0 million to refinance the Obagi Existing Credit Agreement) or convertible note or other offering (in the case of Waldencast and its subsidiaries, excluding any cash already covered by clauses (w), (x) or (y) above), in each case, as of the Milk Closing; |
• | “Milk Closing Date” means the date on which the Milk Closing actually occurs; |
• | “Milk Common Units” means the authorized issued and outstanding common units of Milk; |
• | “Milk Confidentiality Agreement” means the Confidentiality Agreement, dated as of June 27, 2021, between Waldencast and Milk, as amended by the Confidentiality Agreement Side Letter, dated as of August 11, 2021, between Waldencast and Milk; |
• | “Milk Equity Consideration” means a number of Waldencast LP Common Units equal to (x) the Total Implied Milk Equity Consideration, minus (y) a number of units of Waldencast LP Common Units equal to the quotient obtained by dividing (A) the Milk Cash Consideration by (B) $10.00; |
• | “Milk Equity Interests” means the Milk Awards, Milk Membership Units and the Milk Warrants, collectively; |
• | “Milk Equity Purchase Agreement” means the Equity Purchase Agreement, dated as of November 15, 2021, by and among Waldencast, Waldencast LP, Holdco 1, Milk, the Milk Members and the Equityholder Representative, a copy of which is attached to this proxy statement/prospectus as Annex B; |
• | “Milk Exchange Ratio” means the ratio equal to (i) the number of Waldencast ordinary shares equal to the number of Waldencast LP Common Units constituting the Total Implied Milk Equity Consideration divided by (ii) the number of Aggregate Fully Diluted Milk Common Units; |
• | “Milk Existing Credit Agreement” means the Loan and Security Agreement, dated as of October 10, 2019 (as amended by that certain First Amendment and Waiver to Loan and Security Agreement, dated as of May 4, 2020, that certain Second Amendment to Loan and Security Agreement, dated as of November 27, 2020, that certain Third Amendment to Loan and Security Agreement, dated as of February 25, 2021, that |
• | “Milk LLC Agreement” means the Fifth Amended and Restated Operating Agreement of Milk, dated as of November 5, 2021; |
• | “Milk Lock-Up Agreement” means each of the lock-up agreements to be entered into between Waldencast plc and each of the Milk Members entering into such lock-up agreements; |
• | “Milk Members” means the preferred and common members of Milk; |
• | “Milk Membership Units” means the Milk Common Units and the Milk Preferred Units, collectively; |
• | “Milk Option” means an option to purchase a Milk Common Unit; |
• | “Milk Per Unit Transaction Consideration” means the product obtained by multiplying (i) the Milk Exchange Ratio by (ii) $10.00; |
• | “Milk Pre-Closing Restructuring” means certain distribution by direct and indirect holders of certain Milk Membership Units to occur prior to the Milk Closing; |
• | “Milk Preferred Units” means the authorized preferred units of Milk, comprised of the Milk Series A Preferred Units, Milk Series B Preferred Units, Milk Series C Preferred Units and Milk Series D Preferred Units; |
• | “Milk Purchasers” means Waldencast LP and Holdco 1 together; |
• | “Milk Series A Preferred Units” means the authorized, issued and outstanding Milk Preferred Units designated as Series A Preferred Units pursuant to the Milk LLC Agreement; |
• | “Milk Series B Preferred Units” means the authorized, issued and outstanding Milk Preferred Units designated as Series B Preferred Units pursuant to the Milk LLC Agreement; |
• | “Milk Series C Preferred Units” means the authorized, issued and outstanding Milk Preferred Units designated as Series C Preferred Units pursuant to the Milk LLC Agreement; |
• | “Milk Series D Preferred Units” means the authorized, issued and outstanding Milk Preferred Units designated as Series D Preferred Units pursuant to the Milk LLC Agreement; |
• | “Milk Sponsor Support Agreement” means that certain Sponsor Support Agreement, dated as of the date of the Milk Equity Purchase Agreement, by and among the Sponsor, Waldencast and Milk, as amended or modified from time to time; |
• | “Milk Transaction” means the Milk Purchasers’ acquisition from the Milk Members, and the Milk Members’ sale to the Milk Purchasers, of all of the issued and outstanding Milk Membership Units representing all of the issued and outstanding membership interests of Milk in exchange for the Milk Cash Consideration, the Milk Equity Consideration and the Waldencast plc Non-Economic ordinary shares; |
• | “Milk Transaction Effective Time” means the time at which the Milk Closing shall be deemed effective; |
• | “Milk Transaction Expenses” means the following out-of-pocket fees and expenses paid or payable by Milk or any of its subsidiaries (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the transactions contemplated hereby: (a) all documented fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers, (b) change-in-control payments, transaction bonuses, retention payments, severance or similar compensatory payments payable by Milk or any of its subsidiaries to any current or former employee, independent contractor, officer or director of Milk or any of its subsidiaries as a result of the transactions contemplated hereby (and not tied to any subsequent event or condition, such as a termination of employment), including the employer portion of payroll taxes arising therefrom, (c) the filing fees payable by Milk or any of its subsidiaries to the Antitrust Authorities specified in Section 8.1(e) of the Milk Equity Purchase Agreement and (d) amounts owing or that may become owed, payable or otherwise due, |
• | “Milk UARs” means a unit appreciation right in respect of Milk Common Units issued pursuant to the Milk Appreciation Rights Plan; |
• | “Milk Warrants” means (i) the warrants to purchase the series of units issued on October 10, 2019, by Milk to PWB (as the warrantholder), pursuant to which PWB was provided the right to exercise such warrants for 10,297 Milk Series C Preferred Units and (ii) the warrant to purchase the series of units issued on October 10, 2019, by Milk to PWB (as the warrantholder), pursuant to which PWB was provided the right to exercise such warrants for 6,139 Milk Series D Preferred Units; |
• | “Minimum Available Waldencast Cash Amount” means $50.0 million; |
• | “Nasdaq” means The Nasdaq Stock Market LLC; |
• | “Obagi” means Obagi Global Holdings Limited, a Cayman Islands exempted company limited by shares; |
• | “Obagi Cash Consideration” means an amount equal to $380.0 million minus the Obagi Cash Consideration Reduction Amount; |
• | “Obagi Cash Consideration Reduction Amount” means |
(a) | if (i) the Obagi Closing Available Cash is greater than $670.0 million and (ii) the amount of Obagi Transaction Expenses exceeds $26.0 million (any excess, the “Obagi Transaction Expenses Overage”), an amount equal to the Obagi Transaction Expenses Overage; |
(b) | if the Obagi Closing Available Cash is equal to or less than (i) $670.0 million, and greater than (ii) $630.0 million, an amount equal to (A) $380.0 million, minus (B) the Obagi Closing Available Cash, plus (C) the Total Obagi Transaction Expenses, minus (D) the sum of the Waldencast Transaction Expenses and the Milk Transaction Expenses, plus (E) $35.0 million, plus (F) $89.0 million, plus (G) $140.0 million, plus (H) the amount by which the Obagi Transaction Expenses are less than $26.0 million, if any; |
(c) | if the Obagi Closing Available Cash is equal to or less than $630.0 million and greater than $615.0 million, an amount equal to (i) $40.0 million, plus (ii) the Obagi Transaction Expenses Overage; |
(d) | if the Obagi Closing Available Cash is equal to or less than $615.0 million and greater than $565.0 million, an amount equal to (i) $40.0 million, plus (ii) the Obagi Transaction Expenses Overage, if any, plus (iii) 25% of the amount equal to (A) $340.0 million, minus (B) the Obagi Transaction Expenses Overage, if any, minus (C) the Obagi Closing Available Cash, plus (D) the Total Obagi Transaction Expenses, plus (E) $89.0 million, plus (F) $140.0 million, minus (G) $15.0 million, minus (H) the sum of the Waldencast Transaction Expenses and the Milk Transaction Expenses, plus (I) $35.0 million, plus (J) the amount by which the Obagi Transaction Expenses are less than $26.0 million, if any; or |
(e) | if the Obagi Closing Available Cash is equal to or less than $565.0 million, an amount equal to (i) $52.5 million, plus (ii) the Obagi Transaction Expenses Overage, if any, plus (iii) 50% of the amount equal to (A) $327.5 million, minus (B) the Obagi Transaction Expenses Overage, if any, minus (C) the Obagi Available Cash, plus (D) the Total Obagi Transaction Expenses, plus (E) $89.0 million, plus (F) $140.0 million, minus (G) $52.5 million, minus (H) the sum of the Waldencast Transaction Expenses and the Milk Transaction Expenses, plus (I) $35.0 million, plus (J) the amount by which the Obagi Transaction Expenses are less than $26.0 million, if any; |
• | “Obagi China Distribution” means collectively (a) the pre-Obagi Closing distribution by Obagi Holdco to Obagi and the distribution by Obagi to Cedarwalk of all of the issued and outstanding shares of capital stock of Obagi Hong Kong and certain related assets pursuant to the Distribution Agreements, (b) the provision of certain transition services by Obagi Cosmeceuticals and certain of its affiliates to Obagi Hong Kong, and the transactions related thereto, pursuant to the Transition Services Agreement, (c) the supply of products to Obagi Hong Kong for distribution and sale in the China Region, and the transactions related thereto, pursuant to the Supply Agreement, (d) certain governance and stock purchase rights granted to Cedarwalk and Waldencast, as applicable, pursuant to the Investor Rights Agreement and (e) the exclusive license of intellectual property pertaining to the Obagi brand by Obagi Worldwide to Obagi Hong Kong, and the transactions related thereto, pursuant to the IP License Agreement; |
• | “Obagi Closing” means the closing of the transactions contemplated by the Obagi Merger Agreement; |
• | “Obagi Closing Available Cash” means the sum of (w) the cash remaining in the Trust Account (after giving effect to the Waldencast/Obagi Share Redemption (if any)), plus (x) the PIPE Investment Amount actually received by Waldencast prior to or substantially concurrently with the Obagi Closing, plus (y) the Forward Purchase Amount actually received by Waldencast prior to or substantially concurrently with the Obagi Closing, plus (z) the cash and cash equivalents of Waldencast and its Subsidiaries, including the proceeds of any indebtedness incurred after the date hereof (other than any indebtedness of up to $125.0 million to refinance the Obagi Existing Credit Agreement) or convertible note or other offering (in the case of Waldencast and its subsidiaries, excluding any cash already covered by clauses (x), (y) or (z) above), in each case, as of the Obagi Closing; |
• | “Obagi Closing Date” means the date on which the Obagi Closing actually occurs; |
• | “Obagi Common Stock” means the shares in the capital of Obagi of par value US $0.50 each per share; |
• | “Obagi Cosmeceuticals” means Obagi Cosmeceuticals LLC, a Delaware limited liability company; |
• | “Obagi Exchange Ratio” means the ratio equal to (i) the number of Waldencast plc Class A ordinary shares constituting the Total Implied Obagi Equity Consideration divided by (ii) the number of Aggregate Fully Diluted Obagi Common Shares; |
• | “Obagi Existing Credit Agreement” means the Financing Agreement, dated as of March 16, 2021 and as amended on June 10, 2022, by and among Obagi, as ultimate parent, Obagi Holdco, as parent, Obagi Cosmeceuticals, as borrower, the subsidiary guarantors party thereto, the lenders from time to time party thereto and TCW Asset Management Company LLC, as collateral agent and administrative agent, a copy of which is attached to this Registration Statement as Exhibit 10.29; |
• | “Obagi Existing Credit Agreement Consent” means the consent to financing agreement, dated as of the date of Obagi Merger Agreement, by and among, inter alia, the lenders party thereto, TCW Asset Management Company LLC, as collateral agent and administrative agent, Obagi Holdings, as parent, and Obagi Cosmeceuticals, as borrower; |
• | “Obagi Group” means the shareholders or holders of other equity interests of Obagi and/or any of their respective directors, members, partners, officers, employees or affiliates (other than Obagi); |
• | “Obagi Holdco” means Obagi Holdings Company Limited, a Cayman Islands exempted company limited by shares; |
• | “Obagi Hong Kong” means Obagi Hong Kong Limited; |
• | “Obagi Lock-Up Agreement” means each of the lock-up agreements to be entered into between Waldencast plc and each of the Obagi Shareholders entering into such lock-up agreements; |
• | “Obagi Merger” means the merger of Merger Sub with and into Obagi, with Obagi surviving the merger as a wholly owned subsidiary of Holdco 2; |
• | “Obagi Merger Agreement” means that certain Agreement and Plan of Merger, dated as of November 15, 2021, by and among Waldencast, Merger Sub and Obagi, a copy of which is attached to this proxy statement/prospectus as Annex A; |
• | “Obagi Merger Effective Time” means the date and time the Obagi Merger becomes effective; |
• | “Obagi Netherlands” means Obagi Netherlands B.V., a Netherlands private limited company (besloten vennootschapand); |
• | “Obagi Option” means an option to purchase Obagi Common Stock granted under the Obagi Stock Plan; |
• | “Obagi Per Share Merger Consideration” means the product obtained by multiplying (i) the Obagi Exchange Ratio by (ii) $10.00; |
• | “Obagi Pre-Closing Restructuring” means the Obagi China Distribution and the Clinactiv Distribution; |
• | “Obagi RSU” means a restricted stock unit issued in respect of Obagi Common Stock granted pursuant to the Obagi Stock Plan; |
• | “Obagi Shareholders” means the shareholders of Obagi; |
• | “Obagi Sponsor Support Agreement” means that certain Sponsor Support Agreement, dated November 15, 2021, by and among the Sponsor, Waldencast, the Investor Directors and Obagi, as amended and modified from time to time; |
• | “Obagi Stock Consideration” means a number of Waldencast plc ordinary shares equal to (x) the Total Implied Obagi Equity Consideration, minus (y) a number of Waldencast plc ordinary shares equal to the quotient obtained by dividing (A) the Obagi Cash Consideration by (B) $10.00; |
• | “Obagi Stock Plan” means the Obagi Global Holdings Limited 2021 Stock Incentive Plan to be assumed by Waldencast at the Obagi Merger Effective Time; |
• | “Obagi Transaction Expenses” means the following out-of-pocket fees and expenses paid or payable by Obagi or any of its subsidiaries (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation or consummation of the transactions contemplated by the Obagi Merger Agreement: (a) all documented fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers; (b) change-in-control payments, transaction bonuses, retention payments, severance or similar compensatory payments payable by Obagi or any of its subsidiaries to any current or former employee, independent contractor, officer or director of Obagi or any of its subsidiaries as a result of the transactions contemplated by the Obagi Merger Agreement (and not tied to any subsequent event or condition, such as a termination of employment), including the employer portion of payroll taxes arising therefrom; (c) the filing fees payable by Obagi or any of its subsidiaries to the Antitrust Authorities specified in Section 8.1(e) of the Obagi Merger Agreement; and (d) amounts owing or that may become owed, payable or otherwise due, directly or indirectly, by Obagi or any of its subsidiaries to any affiliate of Obagi or any of its subsidiaries in connection with the negotiation, documentation or consummation of the transactions contemplated hereby, including fees, costs and expenses related to the termination of any Affiliate Agreement. For the avoidance of doubt, Obagi Transaction Expenses shall not include any fees and expenses of Obagi’s Shareholders, any Up-C Transaction Expenses, any Financing Expenses or any expenses of Obagi or its subsidiaries to the extent attributable to advice solely for the benefit of Obagi’s direct or indirect shareholders (rather than Obagi or its subsidiaries); |
• | “Obagi Worldwide” means Obagi Cosmeceuticals and Obagi Holdings; |
• | “ordinary shares” means the Waldencast Class A ordinary shares and the Waldencast Class B ordinary shares, collectively; |
• | “Osibao Note” means the promissory noted dated July 30, 2021, of Osibao Cosmetics International Limited payable to the order of Obagi Cosmeceuticals, LLC in the principal amount of $2.5 million; |
• | “Person” means any individual, firm, corporation, partnership, exempted limited partnership, limited liability company, exempted company, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or instrumentality or other entity of any kind; |
• | “PFIC” means a passive foreign investment company; |
• | “PIPE Investment” means the purchase of shares of Waldencast plc pursuant to the Subscription Agreements; |
• | “PIPE Investment Amount” means the aggregate gross purchase price received by Waldencast substantially concurrently with or immediately following Closing for the shares in the PIPE Investment; |
• | “PIPE Investors” means those certain investors participating in the purchase of shares of Waldencast plc pursuant to the Subscription Agreements; |
• | “private placement warrants” means the Waldencast plc private placement warrants outstanding as of the date of this proxy statement/prospectus and the warrants of Waldencast plc issued as a matter of law upon the conversion thereof at the time of the Domestication; |
• | “Proposed Constitutional Document” means the proposed memorandum and articles of association of Waldencast plc upon the effective date of the Domestication attached to this proxy statement/prospectus as Annex G; |
• | “public shareholders” means holders of public shares, whether acquired in Waldencast’s initial public offering or acquired in the secondary market; |
• | “public shares” means the Waldencast Class A ordinary shares (including those underlying the units) that were offered and sold by Waldencast in its initial public offering and registered pursuant to the IPO Registration Statement or the Waldencast plc Class A ordinary shares issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires; |
• | “public warrants” means the redeemable warrants (including those underlying the units) that were offered and sold by Waldencast in its initial public offering and registered pursuant to the IPO Registration Statement or the redeemable warrants of Waldencast plc issued as a matter of law upon the conversion thereof at the time of the Domestication, as context requires; |
• | “PWB” means Pacific Western Bank; |
• | “Record Date” means May 27, 2022; |
• | “redemption” means each redemption of public shares for cash pursuant to the Cayman Constitutional Documents and the Proposed Constitutional Document; |
• | “Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement to be entered into by and among Waldencast plc, Sponsor, the Target Holders, the Investor Directors and the parties set forth on Schedule 2 thereto; |
• | “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended; |
• | “SEC” means the U.S. Securities and Exchange Commission; |
• | “Securities Act” means the Securities Act of 1933, as amended; |
• | “Sponsor” means Waldencast Long-Term Capital LLC, a Cayman Islands limited liability company; |
• | “Sponsor Forward Purchase Agreement” means the Forward Purchase Agreement initially entered into on February 22, 2021, by and among Waldencast, the Sponsor and Dynamo Master Fund (a member of the Sponsor). On December 20, 2021, the Sponsor and Burwell Mountain Trust (a member of the Sponsor) entered into an assignment and assumption agreement, pursuant to which the Sponsor assigned, and Burwell Mountain Trust assumed, all of the Sponsor’s rights and benefits as purchaser under the Sponsor Forward Purchase Agreement, including the right to purchase the Waldencast plc Units subscribed for by the Sponsor; |
• | “Sponsor Support Agreements” means the Obagi Sponsor Support Agreement and the Milk Sponsor Support Agreement, together; |
• | “Stockholder Support Agreement” means that certain Support Agreement, dated November 15, 2021, by and among Waldencast, Cedarwalk and Obagi, as amended and modified from time to time; |
• | “Subscription Agreements” means the Initial Subscription Agreements and Subsequent Subscription Agreements pursuant to which the PIPE Investment will be consummated; |
• | “Subsequent PIPE Investment” means the purchase of Waldencast plc Class A ordinary shares pursuant to the Subsequent Subscription Agreements; |
• | “Subsequent PIPE Investors” means those certain investors participating in the purchase of shares of Waldencast plc pursuant to the Subsequent Subscription Agreements; |
• | “Subsequent Subscription Agreements” means the subscription agreements, if any, executed after November 15, 2021, and on or prior to the Closing Date pursuant to which the Subsequent PIPE Investment will be consummated; |
• | “subsidiary” means, with respect to any Person, any corporation, company, exempted company, limited liability company, partnership, exempted limited partnership, association or other business entity of which the first Person: (a) owns, directly or indirectly, more than fifty percent (50%) of the equity securities or equity interests; (b) owns, directly or indirectly, a majority of the total voting power of the equity securities or equity interests entitled to vote in the election of directors, managers or trustees thereof or other Persons performing similar functions; or (c) has a right to appoint fifty percent (50%) or more of the directors or managers. |
• | “Supply Agreement” means the Global Supply Services Agreement substantially in the form attached to the Obagi Merger Agreement as Exhibit D (with such changes as may be agreed in writing by Obagi and Waldencast), to be entered into by and between Obagi Cosmeceuticals and Obagi Hong Kong; |
• | “Target Holders” means, as of the date of the Registration Rights Agreement, the former shareholders and members, respectively, of Obagi and Milk as set forth on Schedule 1 thereto; |
• | “Third-Party Forward Purchase Agreement” means the Forward Purchase Agreement by and between Waldencast and Beauty Ventures whereby, among other things, Beauty Ventures agreed to acquire Waldencast plc Units. The Sponsor is the managing member of Beauty Ventures. Members of the Sponsor or their affiliates will begin to receive a twenty percent (20%) performance fee allocation on the return of the forward purchase securities in excess of the hurdle rate, calculated on the total return generated from forward purchase securities (whether by dividend, transfer or increase in value as measured from date of issuance), when the return of such securities (less the expenses of Beauty Ventures) underlying the Third-Party Forward Purchase Agreement exceeds a hurdle rate of five percent (5%) accrued annually until the fifth anniversary of the issuance of such securities. In the event of a transfer and subsequent sale of any forward purchase securities prior to such fifth anniversary, the performance fee for the period between such transfer and such fifth anniversary will be calculated based on the proceeds generated by such sale; |
• | “Total Implied Milk Equity Consideration” means a number of Waldencast LP Common Units equal to the quotient obtained by dividing (i) $340.0 million plus the Aggregate Milk Option Exercise Price plus the Aggregate Milk UAR Strike Price plus the Aggregate Milk Warrant Exercise Price by (ii) $10.00; |
• | “Total Implied Obagi Equity Consideration” means a number of Waldencast plc ordinary shares equal to the quotient obtained by dividing (i) $655.0 million plus the Aggregate Obagi Option Exercise Price by (ii) $10.00; |
• | “Total Obagi Transaction Expenses” means the Waldencast Transaction Expenses plus the Obagi Transaction Expenses plus the Milk Transaction Expenses; |
• | “Transaction Agreements” means the Obagi Merger Agreement together with the Milk Equity Purchase Agreement; |
• | “Transaction Proposals” means, collectively, the Condition Precedent Proposals and the Adjournment Proposal; |
• | “Transactions” means the Obagi Merger together with the Milk Transaction; |
• | “transfer agent” means Continental, acting as transfer agent; |
• | “Transition Services Agreement” means the transition services agreement to be entered by and among Obagi Cosmeceuticals, certain of its affiliates, and Obagi Hong Kong; |
• | “trust account” or “Trust Account” means the trust account established at the consummation of Waldencast’s initial public offering at J.P. Morgan Chase Bank, N.A. and maintained by Continental, acting as trustee; |
• | “Trust Agreement” means the Investment Management Trust Agreement, dated as of March 15, 2021, between Waldencast and Continental, as trustee; |
• | “Up-C Contributions” means Holdco 1’s contribution of its equity interests in (a) Milk to Waldencast LP in exchange for limited partnership units in Waldencast LP and (b) Holdco 2 in exchange for limited partnership units in Waldencast LP; |
• | “Up-C Transaction” means any action required to collectively structure the Obagi Merger and the Milk Transaction as what is commonly referred to as an “Up-C transaction”; |
• | “Up-C Transaction Expenses” means any documented fees and expenses, both internal or external, including those payable to consultants, advisors (financial or otherwise), accountants, attorneys and service providers, incurred by the Company in connection with the Up-C Transaction; |
• | “U.S. Holder” means a beneficial owner of Waldencast Class A ordinary shares or Waldencast plc Class A ordinary shares (as the case may be) who or that is, for U.S. federal income tax purposes: (a) an individual citizen or resident of the U.S., (b) a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of the U.S. or any state thereof or the District of Columbia, (c) an estate whose income is subject to U.S. federal income tax regardless of its source, or (d) a trust if (i) a U.S. court can exercise primary supervision over the administration of such trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) it has a valid election in place to be treated as a U.S. person; |
• | “Waldencast” and the “Registrant” mean Waldencast Acquisition Corp., a Cayman Islands exempted company limited by shares, prior to its migration and domestication as a public limited company incorporated under the laws of Jersey; |
• | “Waldencast Class A ordinary shares” means Waldencast’s Class A ordinary shares, par value $0.0001 per share; |
• | “Waldencast Class B ordinary shares” means Waldencast’s Class B ordinary shares, par value $0.0001 per share; |
• | “Waldencast Credit Agreement” means that certain Credit Agreement, dated as of June 24, 2022, by and among Waldencast Finco, Waldencast LP, the lenders from time to time party thereto and JPMorgan Chase Bank, as administrative agent; |
• | “Waldencast Finco” means Waldencast Finco Limited, a private company incorporated under the laws of Jersey; |
• | “Waldencast LP” means Waldencast Partners LP, a Cayman Islands exempted limited partnership; |
• | “Waldencast LP Common Units” means limited partnership units of Waldencast LP that, in the case of such units issued as part of, or in respect of, the Milk Equity Consideration, are redeemable at the option of the holder of such units and, if such option is exercised, exchangeable at the option of Waldencast plc for Waldencast plc Class A ordinary shares or cash in accordance with the terms of the Amended and Restated Waldencast Partners LP Agreement; |
• | “Waldencast/Milk Share Redemptions” means the election of an eligible (as determined in accordance with the Cayman Constitutional Documents) holder of Waldencast Class A ordinary shares to redeem all or a portion of the ordinary shares held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account) (as determined in accordance with the Cayman Constitutional Documents) in connection with the Transaction Proposals; |
• | “Waldencast/Obagi Share Redemptions” means the election of an eligible (as determined in accordance with the Cayman Constitutional Documents) holder of Waldencast Class A ordinary shares to redeem all or a portion of the ordinary shares held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account) (as determined in accordance with the Cayman Constitutional Documents) in connection with the Transaction Proposals; |
• | “Waldencast plc” means Waldencast after the Domestication and its name change from Waldencast Acquisition Corp. to Waldencast plc; |
• | “Waldencast plc 2022 Incentive Award Plan” means the omnibus equity incentive plan of Waldencast plc to be approved and adopted by the board of directors of Waldencast, subject to the shareholders of Waldencast approving the BCA Proposal and the Domestication Proposal at the extraordinary general meeting to be effective prior to the Closing Date; |
• | “Waldencast plc Board” means the board of directors of Waldencast plc; |
• | “Waldencast plc Class A ordinary shares” means shares of Waldencast plc common stock, par value $0.0001 per share; |
• | “Waldencast plc Non-Economic ordinary shares” means, after the Milk Closing, Class B ordinary fully paid shares in the capital of Waldencast plc, par value $0.0001 per share, with such shares entitled to one vote per share, and no additional rights, including no economic rights; |
• | “Waldencast plc Option” means an option to purchase Waldencast plc Class A ordinary shares; |
• | “Waldencast plc ordinary shares” means the Waldencast plc Class A ordinary shares and the Waldencast plc Non-Economic ordinary shares; |
• | “Waldencast plc RSU” means a restricted stock unit with respect to Waldencast plc Class A ordinary shares; |
• | “Waldencast plc SAR” means a stock appreciation right with respect to Waldencast plc Class A ordinary shares; |
• | “Waldencast plc Units” means units of Waldencast plc; |
• | “Waldencast plc warrant” means a warrant to acquire one Waldencast plc Class A ordinary share; |
• | “Waldencast Transaction Expenses” means the following out-of-pocket fees and expenses paid or payable by Waldencast or any of its affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation or consummation of the Obagi Merger: (a) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers; (b) the filing fees payable by Waldencast or any of its subsidiaries to the Antitrust Authorities as specified in Section 8.1(e) of the Obagi Merger Agreement; (c) all fees and expenses incurred in connection with preparing and filing this proxy statement/prospectus and obtaining approval of the Nasdaq under Section 7.3 of the Obagi Merger Agreement; (d) repayment of any Working Capital Loans; (e) any fees and expenses incurred in connection with the PIPE Investment; (f) any deferred underwriting commissions and other fees and expenses relating to Waldencast’s initial public offering or operations; (g) any other fees and expenses as a result of or in connection with the negotiation, documentation or consummation of the transactions contemplated hereby; (h) the Up-C Transaction Expenses; and (i) any other fees and expenses incurred in connection with (x) obtaining the consent of TCW Asset Management Company LLC and any other parties required under the terms of the Obagi Existing Credit Agreement to (A) enter into and consummate the Obagi Merger and the transactions contemplated thereby or (B) permit any indebtedness outstanding under the Obagi Existing Credit Agreement to remain outstanding following the Closing, (y) any amendment to, or refinancing of, the Obagi Existing Credit Agreement or (z) the incurrence of any new indebtedness, if requested by Waldencast (the “Financing Expenses”). Waldencast Transaction Expenses shall not include any fees and expenses of Waldencast’s shareholders (other than Working Capital Loans); |
• | “Waldencast units” and “units” mean the units of Waldencast, each unit representing one Waldencast Class A ordinary share and one-third of one redeemable warrant to acquire one Waldencast Class A ordinary share, that were offered and sold by Waldencast in its initial public offering and registered pursuant to the IPO Registration Statement (less the number of units that have been separated into the underlying public shares and underlying warrants upon the request of the holder thereof); |
• | “warrants” means the public warrants, the private placement warrants, the Sponsor FPA warrans and the Working Capital Loan warrants; and |
• | “Working Capital Loans” means any loan made to Waldencast by any of the Sponsor, an affiliate of the Sponsor, or any of Waldencast’s officers or directors, and evidenced by a promissory note, for the purpose of financing costs incurred in connection with a Business Combination. |
• | Waldencast’s ability to complete the Business Combination or, if Waldencast does not consummate such Business Combination, any other initial business combination; |
• | satisfaction or waiver (if applicable) of the conditions to the Obagi Merger, including, among other things: |
• | the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Obagi Merger and related agreements and transactions by the respective shareholders of Waldencast and Obagi; (ii) effectiveness of the registration statement of which this proxy statement/prospectus forms a part (the “Registration Statement”); (iii) obtainment, expiration or termination of the waiting period under the HSR Act, as applicable; (iv) the absence of any Governmental Order (as defined in the Obagi Merger Agreement) enjoining or otherwise prohibiting the consummation of the Obagi Merger in the certain specified governing jurisdictions; provided that the Governmental Authority (as defined in the Obagi Merger Agreement) issuing such Governmental Order has jurisdiction over the parties thereto with respect to the transactions contemplated thereby, or any law or regulation in such governing jurisdictions that would result in the consummation of the Obagi Merger being illegal or otherwise prohibited; (v) the satisfaction of all closing conditions in the Milk Equity Purchase Agreement and the completion of the transactions contemplated thereby; (vi) that Waldencast have at least $5,000,001 of net tangible assets (inclusive of the PIPE Investment Amount and the Forward Purchase Amount, in each case, actually received by Waldencast prior to or substantially concurrently with the Closing (as defined herein)) upon Closing; (vii) the completion of the domestication by way of continuance of Waldencast as a Jersey public limited company and deregistration in the Cayman Islands in accordance with Part 18C of the Companies (Jersey) Law 1991, as amended (the “Jersey Companies Law”), and the Cayman Islands Companies Act (As Revised) (the “Cayman Islands Companies Act”) (such domestication, the “Domestication”); (viii) the completion of the Obagi China Distribution and (ix) customary bringdown of the representations, warranties and covenants of the parties therein; |
• | the Obagi Cash Consideration equals or exceeds $327.5 million, minus the Obagi Transaction Expenses Overage; and |
• | the Minimum Available Waldencast Cash Amount equals or exceeds $50.0 million; |
• | satisfaction or waiver (if applicable) of the conditions to the Milk Equity Purchase Agreement, including, among other things: |
• | the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Milk Transaction and related agreements and transactions by the shareholders of Waldencast; (ii) effectiveness of the Registration Statement (iii) obtainment, expiration or termination |
• | the Milk Cash Consideration equals or exceeds $112.5 million; and |
• | the Minimum Available Waldencast Cash Amount equals or exceeds $50.0 million; |
• | the occurrence of any other event, change or other circumstances that could give rise to the termination of the Obagi Merger Agreement or the Milk Equity Purchase Agreement; |
• | the amount of redemptions by Waldencast’s public shareholders; |
• | our ability to raise financing in the future; |
• | the Sponsor and Waldencast’s directors and executive officers potentially having conflicts of interest with regard to the Business Combination with Obagi and Milk; |
• | exposure to unknown or contingent liabilities associated with Obagi and/or Milk; |
• | the Sponsor’s election to purchase shares or warrants from public shareholders prior to the consummation of the Business Combination; |
• | the impact of the COVID-19 pandemic on our, Obagi’s and Milk’s ability to consummate the Business Combination, and on Waldencast plc’s operations following the Business Combination; |
• | our ability to develop and maintain an effective system of internal control over financial reporting and accurately report our financial results in a timely manner; |
• | the ability of Obagi and Milk to maintain and enhance their products and brands and to attract customers; |
• | the ability of Obagi and Milk to execute their business models, including market acceptance of their planned products and sufficient production volumes at acceptable quality levels and prices, protecting their proprietary rights and the success of strategic relationships with third parties; and |
• | other factors detailed in the section entitled “Risk Factors.” |
Q: | Why am I receiving this proxy statement/prospectus? |
A: | Waldencast shareholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Transaction Agreements and approve the Business Combination. The Obagi Merger Agreement provides for, among other things, the merger of Merger Sub with and into Obagi, with Obagi surviving the merger as wholly owned subsidiary of Holdco 2 and an indirect wholly owned subsidiary of Waldencast plc, in accordance with the terms and subject to the conditions of the Obagi Merger Agreement as more fully described elsewhere in this proxy statement/prospectus. The Milk Equity Purchase Agreement provides, among other things, for the purchase of all of the issued and outstanding membership interests of Milk by the Milk Purchasers, in accordance with the terms and subject to the conditions of the Milk Equity Purchase Agreement as more fully described elsewhere in this proxy statement/prospectus. See the section entitled “BCA Proposal” for more detail. |
Q: | What is the transaction structure? |
A: | The current organizational structure of Waldencast is as follows: |
Q: | What proposals are shareholders of Waldencast being asked to vote upon? |
A: | At the extraordinary general meeting, Waldencast is asking holders of ordinary shares to consider and vote upon: |
• | proposals to approve by ordinary resolution and adopt the Transaction Agreements; |
• | a proposal to approve by special resolution the Domestication; |
• | the following four separate proposals to approve by special resolution and ordinary resolution, as applicable and as more fully described elsewhere in this proxy statement/prospectus, the following material differences between the Cayman Constitutional Documents and the Proposed Constitutional Document: |
• | to authorize the change in the authorized share capital of Waldencast from (i) 500,000,000 Waldencast Class A ordinary shares, 50,000,000 Waldencast Class B ordinary shares and 5,000,000 preferred shares, par value $0.0001 per share, to (ii) 1,000,000,000 Waldencast plc Class A ordinary shares, 100,000,000 Waldencast plc Non-Economic ordinary shares and 25,000,000 shares of Waldencast plc preferred stock, respectively; |
• | to provide that the Waldencast plc Board be divided into three classes, with each class made up of, as nearly as may be possible, one-third of the total number of directors constituting the entire Waldencast plc Board, with only one class of directors being elected in each year and each class serving a three-year term; |
• | to provide that certain provisions of the Proposed Constitutional Document will be subject to the Investor Rights Agreement, including provisions governing the appointment, removal and replacement of directors, with respect to which Cedarwalk will have certain rights pursuant to the Investor Rights Agreement; and |
• | to authorize all other changes in connection with the replacement of the Cayman Constitutional Documents with the Proposed Constitutional Document as part of the Domestication, including (1) changing the corporate name from “Waldencast Acquisition Corp.” to “Waldencast plc,” (2) making Waldencast plc’s existence for an unlimited duration and (3) removing certain provisions related to Waldencast’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which Waldencast’s board of directors believes is necessary to adequately address the needs of Waldencast plc after the Business Combination; |
• | a proposal to approve by ordinary resolution of the holders of Waldencast Class B ordinary shares, such holders being the Sponsor and the Investor Directors, the election of nine directors to serve staggered terms, who, upon consummation of the Business Combination, will be the directors of Waldencast plc; |
• | proposals to approve by ordinary resolution, for purposes of complying with applicable listing rules of Nasdaq, the issuance of (a) Waldencast plc Class A ordinary shares to the PIPE Investors pursuant to the PIPE Investment and to the Obagi Shareholders pursuant to the Obagi Merger Agreement and (b) Waldencast plc Units to the Forward Purchasers pursuant to the Forward Purchase Transaction; |
• | a proposal to approve by ordinary resolution the issuance of Waldencast plc Non-Economic ordinary shares and the reservation for issue of Waldencast plc Class A ordinary shares in exchange for Waldencast LP Common Units, in each case, to the Milk Members; |
• | a proposal to approve by ordinary resolution the Waldencast plc 2022 Incentive Award Plan; and |
• | a proposal to approve the adjournment of the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. |
Q: | Are the proposals conditioned on one another? |
A: | Yes. The Business Combination is conditioned on the approval of each of the Condition Precedent Proposals at the extraordinary general meeting. Each of the Condition Precedent Proposals is cross-conditioned on the approval of each other. The Adjournment Proposal is not conditioned upon the approval of any other proposal. |
Q: | Why is Waldencast proposing the Business Combination? |
A: | Waldencast was organized to effect a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination, with one or more businesses or entities. |
Q: | What will Obagi Shareholders and Milk Members receive in return for Waldencast’s acquisition of all of the issued and outstanding equity interests of Obagi and Milk? |
A: | It is anticipated that, at the Obagi Merger Effective Time (after giving effect to the Obagi Pre-Closing Restructuring, as defined herein and as more fully described in the Obagi Merger Agreement and elsewhere in this proxy statement/prospectus), among other things, the outstanding shares of Obagi Common Stock as of immediately prior to the Obagi Merger Effective Time (other than in respect of excluded shares as described more fully in the Obagi Merger Agreement) will be cancelled and converted into the right to receive, (a) an amount in cash equal to the quotient obtained by dividing (i) the Obagi Cash Consideration by (ii) the number of Aggregate Fully Diluted Obagi Common Shares; and (b) a number of Waldencast plc Class A ordinary shares equal to the quotient obtained by dividing (i) the Obagi Stock Consideration by (ii) the number of Aggregate Fully Diluted Obagi Common Shares, which will represent, in the aggregate, a pre-transaction equity value of Obagi of $655.0 million. Subject to the assumptions below, at the Obagi Merger Effective Time (after giving effect to the Obagi Pre-Closing Restructuring) it is anticipated that, among other things, the outstanding shares of Obagi Common Stock as of immediately prior to the Obagi Merger Effective Time (other than in respect of excluded shares as described more fully in the Obagi Merger Agreement) will be cancelled and converted into the right to receive approximately (a) $380.0 million; and (b) 22,851,564 Waldencast plc Class A ordinary shares which will represent, in the aggregate, a pre-transaction equity value of Obagi of $655.0 million. The number of shares and amount of cash payable set forth above assumes that (a) none of Waldencast’s shareholders will elect to redeem their Class A ordinary shares for a pro rata portion of cash in the Trust Account, and thus the full amount of the approximately $345.1 million held in the Trust Account will be available to the combined company after the closing of the Business Combination, (b) Waldencast sells and issues (i) 11,300,000 Waldencast plc Class A ordinary shares to the PIPE Investors pursuant to the PIPE Investment and (ii) 33,300,000 Waldencast plc Units to the Forward Purchasers, comprising of 33,300,000 Waldencast plc Class A ordinary shares and 11,100,000 warrants to purchase one Waldencast plc Class A ordinary share, pursuant to the Forward Purchase Transaction, (c) Obagi will not issue any additional equity securities or convert any equity securities into Obagi Common Stock prior to the Business Combination, (d) the Obagi Transaction Expenses will not exceed $26.0 million and (e) all conditions to closing of the Business Combination will be satisfied and waived. If the actual facts differ from such assumptions, the number of shares and amount of cash payable set forth above will be different. The following table illustrates the number of shares and amount of cash payable to the Obagi Shareholders at different possible redemption levels: |
(In millions, except share data) | | | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions(1) |
Cash to Obagi Shareholders(2) | | | $375.6 | | | $375.6 | | | $323.1 | | | $323.1 | | | $323.1 |
Waldencast plc Class A Shares to Obagi Shareholders | | | 22,851,564 | | | 22,851,564 | | | 28,101,564 | | | 28,101,564 | | | 28,101,564 |
(1) | Assumes that 32,709,191 Class A ordinary shares are redeemed in connection with the Business Combination, which is the maximum number of shares that may be redeemed without causing the Minimum Cash Condition to the closing of the Business Combination to be unsatisfied. |
(2) | Cash consideration to the Obagi Shareholder subject to reduction in accordance with the terms of the Conditional Consent. For additional information, see the section entitled “BCA Proposal — Related Agreements — Related Agreements to the Obagi Merger — Conditional Consent.” |
(In millions, except share data) | | | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions(1) |
Cash to Milk Members | | | $140.0 | | | $140.0 | | | $116.8 | | | $116.8 | | | $116.8 |
Waldencast LP Common Units to Milk Members | | | 18,343,883 | | | 18,343,883 | | | 20,665,183 | | | 20,665,183 | | | 20,665,183 |
Waldencast plc Non-Economic ordinary shares | | | 18,343,883 | | | 18,343,883 | | | 20,665,183 | | | 20,665,183 | | | 20,665,183 |
(1) | Assumes that 32,709,191 Class A ordinary shares are redeemed in connection with the Business Combination, which is the maximum number of shares that may be redeemed without causing the Minimum Cash Condition to the closing of the Business Combination to be unsatisfied. |
Q: | What equity stake will current Waldencast shareholders, Obagi Shareholders and Milk Members hold in Waldencast plc immediately after the consummation of the Business Combination? |
A: | As of the date of this proxy statement/prospectus, there are (i) 43,125,000 ordinary shares issued and outstanding, which includes the 8,545,000 founder shares held by the Sponsor, 80,000 founder shares held by the Investor Directors and the 34,500,000 public shares, and (ii) 17,433,333 warrants issued and outstanding, which includes the 5,933,333 private placement warrants held by the Sponsor and the 11,500,000 public warrants. Each whole warrant entitles the holder thereof to purchase one Waldencast Class A ordinary share and, following the Domestication, will entitle the holder thereof to purchase one Waldencast plc Class A ordinary share. Therefore, as of the date of this proxy statement/prospectus (without giving effect to the Business Combination), the Waldencast fully diluted share capital would be 60,558,333 common stock equivalents. |
| | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions(1) | ||||||||||||||||
| | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | |
Waldencast Public Shareholders | | | 34,500,000 | | | 26.8% | | | 24,150,000 | | | 20.4% | | | 11,789,186 | | | 10.4% | | | 3,450,000 | | | 3.3% | | | 1,790,809 | | | 1.7% |
Burwell Mountain Trust(2) | | | 7,848,333 | | | 6.1% | | | 7,848,333 | | | 6.6% | | | 7,848,333 | | | 6.9% | | | 7,848,333 | | | 7.4% | | | 7,848,333 | | | 7.6% |
Dynamo Master Fund(3) | | | 13,848,333 | | | 10.7% | | | 13,848,333 | | | 11.7% | | | 13,848,333 | | | 12.2% | | | 13,848,333 | | | 13.1% | | | 13,848,333 | | | 13.3% |
Waldencast Ventures(4) | | | 2,848,334 | | | 2.2% | | | 2,848,334 | | | 2.4% | | | 2,848,334 | | | 2.5% | | | 2,848,334 | | | 2.7% | | | 2,848,334 | | | 2.7% |
Beauty FPA Investor(5) | | | 17,300,000 | | | 13.4% | | | 17,300,000 | | | 14.6% | | | 17,300,000 | | | 15.2% | | | 17,300,000 | | | 16.4% | | | 17,300,000 | | | 16.7% |
Investor Directors(6) | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% |
PIPE Investors(7) | | | 11,300,000 | | | 8.8% | | | 11,300,000 | | | 9.5% | | | 11,300,000 | | | 9.9% | | | 11,300,000 | | | 10.7% | | | 11,300,000 | | | 10.9% |
Cumulative Waldencast shareholders | | | 87,725,000 | | | 68.0% | | | 77,375,000 | | | 65.2% | | | 65,014,186 | | | 57.1% | | | 56,675,000 | | | 53.7% | | | 55,015,809 | | | 53.0% |
Existing Obagi Owners interest in Waldencast(8) | | | 22,851,564 | | | 17.7% | | | 22,851,564 | | | 19.3% | | | 28,101,564 | | | 24.7% | | | 28,101,564 | | | 26.6% | | | 28,101,564 | | | 27.1% |
Existing Milk Owners interest in Waldencast(9) | | | 18,343,883 | | | 14.2% | | | 18,343,883 | | | 15.5% | | | 20,665,183 | | | 18.2% | | | 20,665,183 | | | 19.6% | | | 20,665,183 | | | 19.9% |
Shares from Milk Warrants(10) | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% |
Total | | | 128,944,607 | | | 100.0% | | | 118,594,607 | | | 100.0% | | | 113,805,093 | | | 100.0% | | | 105,465,907 | | | 100.0% | | | 103,806,716 | | | 100.0% |
1) | Assumes that 32,709,191 Class A ordinary shares are redeemed in connection with the Business Combination which is the maximum number of shares that may be redeemed without causing the Minimum Cash Condition to the closing of the Business Combination to be unsatisfied. The net cash consideration payable to the existing Obagi owners would decrease from $375.6 million to $323.1 million and to the existing Milk owners from $140.0 million to $116.8 million, and the economic ownership and voting power via shares of the existing Obagi and Milk owners would increase proportionally following the Business Combination. |
2) | Includes 5,000,000 Class A ordinary shares acquired pursuant to the Sponsor Forward Purchase Agreement for an investment of $50.0 million by Burwell Mountain Trust (a member of our Sponsor), in exchange for a portion of the Forward Purchase Amount and 2,848,333 ordinary shares issued upon conversion of the existing Waldencast Class B ordinary shares. Class A ordinary shares are issued upon the automatic conversion of the Waldencast Class B ordinary shares concurrently with the consummation of the Business Combination. |
3) | Includes 11,000,000 Class A ordinary shares acquired pursuant to the Sponsor Forward Purchase Agreement for an investment of $110.0 million by Dynamo Master Fund (a member of our Sponsor), in exchange for a portion of the Forward Purchase Amount and 2,848,333 Class A ordinary shares issued upon conversion of the existing Waldencast Class B ordinary shares. Class A ordinary shares are issued upon the automatic conversion of the Waldencast Class B ordinary shares concurrently with the consummation of the Business Combination. |
4) | Class A ordinary shares issued upon conversion of the existing Waldencast Class B ordinary shares. Class A ordinary shares are issued upon the automatic conversion of the Waldencast Class B ordinary shares concurrently with the consummation of the Business Combination. |
5) | 17,300,000 Class A ordinary shares acquired pursuant to the Third-Party Forward Purchase Agreement for an investment of $173.0 million by Beauty Ventures in exchange for a portion of the Forward Purchase Amount. |
6) | 80,000 Class A ordinary shares held by the Investor Directors, issued upon conversion of the existing Waldencast Class B ordinary shares. Waldencast Class A ordinary shares are issued upon the automatic conversion of the Waldencast Class B ordinary shares concurrently with the consummation of the Business Combination. |
7) | Represents the private placement pursuant to which Waldencast entered into Subscription Agreements with certain PIPE Investors whereby such investors have agreed to subscribe for Class A ordinary shares at a purchase price of $10.00 per share. The PIPE Investors participating in the PIPE Investment, have agreed to purchase an aggregate of 11,300,000 Class A ordinary shares. |
8) | Represents Obagi owners’ interest in 22,851,564 Waldencast plc Class A ordinary shares, which will increase in the Maximum Redemption scenario to 28,101,564 due to the reduction in net cash consideration payable. |
9) | Represents the Milk Members’ noncontrolling economic interest in Waldencast LP Common Units, which are redeemable at the option of the holder of such units, and if such option is exercised, are exchangeable, at the option of Waldencast plc, for Waldencast plc Class A ordinary shares on a 1 for 1 basis or cash (together with the cancellation of an equal number of shares of voting, Waldencast plc Non-Economic ordinary shares), and if exchanged for such Waldencast plc Class A ordinary shares, which will increase in the Maximum Redemption scenario due to the reduction in net cash consideration payable. |
10) | Represents Class A ordinary shares that were converted from Milk Warrants at the Closing of the Business Combination. |
11) | Percentage totals may not foot due to rounding. |
| | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemption | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions | ||||||||||||||||
| | Shares | | | Ownership %(8) | | | Shares | | | Ownership %(8) | | | Shares | | | Ownership %(8) | | | Shares | | | Ownership %(8) | | | Shares | | | Ownership %(8) | |
Waldencast Public Shareholders(1) | | | 46,000,000 | | | 27.2% | | | 35,650,000 | | | 22.4% | | | 23,289,186 | | | 22.4% | | | 14,950,000 | | | 10.3% | | | 13,290,809 | | | 9.2% |
Burwell Mountain Trust (2) | | | 11,826,110 | | | 7.0% | | | 11,826,110 | | | 7.4% | | | 11,826,110 | | | 7.4% | | | 11,826,110 | | | 8.1% | | | 11,826,110 | | | 8.2% |
Dynamo Master Fund(3) | | | 19,826,109 | | | 11.7% | | | 19,826,109 | | | 12.5% | | | 19,826,109 | | | 12.5% | | | 19,826,109 | | | 13.6% | | | 19,826,109 | | | 13.8% |
Waldencast Ventures(4) | | | 5,159,447 | | | 3.0% | | | 5,159,447 | | | 3.2% | | | 5,159,447 | | | 3.2% | | | 5,159,447 | | | 3.5% | | | 5,159,447 | | | 3.6% |
Beauty FPA Investor(5) | | | 23,066,666 | | | 13.6% | | | 23,066,666 | | | 14.5% | | | 23,066,666 | | | 14.5% | | | 23,066,666 | | | 15.8% | | | 23,066,666 | | | 16.0% |
Investor Directors | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% | | | 80,000 | | | 0.1% |
PIPE Investors | | | 11,300,000 | | | 6.7% | | | 11,300,000 | | | 7.1% | | | 11,300,000 | | | 7.1% | | | 11,300,000 | | | 7.8% | | | 11,300,000 | | | 7.8% |
Cumulative Waldencast shareholders | | | 117,258,332 | | | 69.3% | | | 106,908,332 | | | 67.3% | | | 94,547,518 | | | 67.3% | | | 86,208,332 | | | 59.2% | | | 84,549,141 | | | 58.7% |
Existing Obagi Owners interest in Waldencast(6) | | | 30,788,000 | | | 18.2% | | | 30,788,000 | | | 19.4% | | | 36,038,000 | | | 19.4% | | | 36,038,000 | | | 24.7% | | | 36,038,000 | | | 25.0% |
Existing Milk Owners interest in Waldencast(7) | | | 21,093,664 | | | 12.5% | | | 21,093,664 | | | 13.3% | | | 23,414,964 | | | 13.3% | | | 23,414,964 | | | 16.1% | | | 23,414,964 | | | 16.3% |
Shares from Milk Warrants | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% | | | 24,160 | | | 0.0% |
Total | | | 169,164,156 | | | 100.0% | | | 158,814,156 | | | 100.0% | | | 154,024,642 | | | 100.0% | | | 145,685,456 | | | 100.0% | | | 144,026,265 | | | 100.0% |
1) | Includes the impact of the exercise of 11,500,000 of public warrants. |
2) | Includes the exercise of (i) 1,977,777 private placement warrants and the exercise of 333,333 Working Capital Loan warrants, which are indirectly owned by Burwell Mountain PTC LLC, as the trustee of Burwell Mountain Trust (a member of the Sponsor), and (ii) 1,666,667 Sponsor FPA warrants. |
3) | Includes the exercise of (i) 1,977,777 private placement warrants and the exercise of 333,333 Working Capital Loan warrants, which are indirectly owned by Dynamo Master Fund as a member of the Sponsor, and (ii) 3,666,666 Sponsor FPA Warrants. |
4) | Includes the exercise of private placement warrants of 1,977,779 and the exercise of Working Capital Loan warrants of 333,334, which are indirectly owned by Waldencast Ventures as a member of the Sponsor. |
5) | Includes the exercise of 5,766,666 of warrants. |
6) | Includes the exercise of rollover equity awards, consisting of 6,085,600 stock options, and 1,850,836 restricted stock units. |
7) | Includes the exercise of rollover equity awards, consisting of 2,512,219 unit appreciation rights and 237,562 options. |
8) | Percentage totals may not foot due to rounding. |
| | Per Share Value | |
Trust value | | | $345,056,000 |
Total Class A Common Shares | | | $34,500,000 |
Trust value per Class A Common Share | | | $10.002 |
In thousands (except share data) | | | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions |
Redemptions ($) | | | $— | | | $103,517 | | | $227,145 | | | $310,550 | | | 327,145 |
Redemptions (Shares) | | | — | | | $10,350,000 | | | 22,710,814 | | | 31,050,000 | | | 32,709,191 |
Deferred underwriting commission | | | $12,075 | | | $12,075 | | | $12,075 | | | $12,075 | | | $12,075 |
Cash left in trust account post redemption minus deferring underwriting commission | | | $332,981 | | | $229,464 | | | $105,836 | | | $22,431 | | | $5,836 |
Total Class A common stock and Class B ordinary shares issued at IPO, post redemption and before Closing of the Transaction | | | 43,125,000 | | | 32,775,000 | | | 20,414,186 | | | 12,075,000 | | | 10,415,809 |
Trust value per share | | | $7.72 | | | $7.00 | | | $5.18 | | | $1.86 | | | $0.56 |
In thousands (except share data) | | | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions |
Redemptions ($) | | | $— | | | $103,517 | | | $227,145 | | | $310,550 | | | $327,145 |
Redemptions (Shares) | | | — | | | 10,350,000 | | | 22,710,814 | | | 31,050,000 | | | 32,709,191 |
Total Deferred Underwriting Commission ($) | | | $12,075 | | | $12,075 | | | $12,075 | | | $12,075 | | | $12,075 |
Effective Deferred Underwriting Commission (as a percentage of cash left in Trust Account post redemptions) | | | 3% | | | 5% | | | 10% | | | 35% | | | 67% |
Total Underwriting Commission ($) | | | $18,975 | | | $18,975 | | | $18,975 | | | $18,975 | | | $18,975 |
Effective Total Underwriting Commission (as a percentage of cash left in Trust Account post redemptions) | | | 5% | | | 8% | | | 16% | | | 55% | | | 106% |
Q: | What is the maximum number of shares that may be redeemed and still allow Waldencast to satisfy the Obagi Minimum Cash Consideration Condition and the Milk Minimum Cash Consideration Condition? |
A: | The maximum number of public shares that may be redeemed and still allow Waldencast to satisfy each of the Obagi Minimum Cash Consideration Condition and the Milk Minimum Cash Consideration Condition is 32,709,191 Class A ordinary shares for aggregate redemption payments of $327.2 million based on the estimated per share redemption value of $10.00. The Obagi Minimum Cash Consideration Condition and the Milk Cash Consideration |
Q: | How has the announcement of the Business Combination affected the trading price of the Waldencast Class A ordinary shares? |
A: | On November 12, 2021, the trading date before the public announcement of the Business Combination, Waldencast’s public units, Class A ordinary shares and warrants closed at $10.10, $9.79 and $1.00, respectively. On July 1, 2022, the most recent practicable date prior to the date of this proxy statement/prospectus, Waldencast’s public units, Waldencast Class A ordinary shares and warrants closed at $10.05, $9.86 and $0.72, respectively. |
Q: | Will Waldencast obtain new financing in connection with the Business Combination? |
A: | Yes. The respective PIPE Investors have agreed to purchase, in the aggregate, 11,300,000 Waldencast plc Class A ordinary shares at $10.00 per share for an aggregate commitment amount of $113.0 million. The PIPE Investment is contingent upon, among other things, the closing of the Business Combination. In the event the Minimum Cash Condition is not satisfied, the Business Combination would not be consummated unless Obagi or Milk, as applicable, waives the Minimum Cash Conditions. See the section entitled “BCA Proposal — Related Agreements — Related Agreements to the Obagi Merger and the Milk Transaction — PIPE Subscription Agreements.” |
Q: | Why is Waldencast proposing the Domestication? |
A: | Our board of directors believes that there are significant advantages to us that will arise as a result of a change of Waldencast’s domicile to Jersey. Furthermore, Waldencast’s board of directors believes that any direct benefit that the Jersey Companies Law provides to a company also indirectly benefits its shareholders, who are the owners of the company. Waldencast’s board of directors believes that there are several reasons why a continuation into Jersey is in the best interests of the Company and its shareholders, including, that Jersey Companies Law: |
• | is founded on the same underlying principles as English company law and, therefore, Jersey companies are very familiar to investors and counterparties who regularly deal with English companies; |
• | applies a flexible capital maintenance regime focused on cashflow-based solvency requirements for a variety of corporate actions (see below); |
• | preserves creditor protection in relation to distributions (dividends, etc.) the making of which is not dependent on any sort of distributable profits/distributable reserves concept, but is instead based on a requirement for the directors who authorize the distribution to make a 12-month, forward-looking, cashflow-based solvency statement in a statutorily prescribed form; |
• | does not impose any restrictions on financial assistance in connection with the acquisition of shares in the relevant company or on the ability of a Jersey company to pay commissions or give discounts in connection with the issue of its shares; |
• | permits what would be referred to in many civil law jurisdictions as ‘capital contributions,’ where contributions from shareholders can be credited to capital (share premium) without issuing shares; and |
• | allows Jersey companies to domesticate or migrate (that is, change jurisdiction of incorporation/corporate seat without breaking corporate existence) to another jurisdiction that permits the same and also allows for the tax residence of the company (via changes made to the location of board meetings and the place of central management of control) to change to reflect the needs of the business of the company. |
Q: | What amendments will be made to the current constitutional documents of Waldencast? |
A: | The Transaction Agreements contemplate, among other things, the Domestication. Accordingly, in addition to voting on the Business Combination, Waldencast’s shareholders are also being asked to consider and vote upon a proposal to approve the Domestication and replace Waldencast’s Cayman Constitutional Documents, in each case, under the Cayman Constitutional Documents and the Cayman Islands Companies Act, with the Proposed Constitutional Document, in each case, under the Jersey Companies Law, which differ materially from the Cayman Constitutional Documents in the following respects: |
| | Cayman Constitutional Documents | | | Proposed Constitutional Document | |
Authorized Shares (Organizational Documents Proposal A) | | | The Cayman Constitutional Documents authorize 555,000,000 shares, consisting of 500,000,000 Waldencast Class A ordinary shares, 50,000,000 Waldencast Class B ordinary shares and 5,000,000 preferred shares. | | | The Proposed Constitutional Document authorizes 1,125,000,000 shares, consisting of 1,000,000,000 Waldencast plc Class A ordinary shares, 100,000,000 Waldencast plc Non-Economic ordinary shares and 25,000,000 shares of Waldencast plc preferred stock. |
| | | | |||
| | See paragraph 5 of the Existing Memorandum. | | | See paragraph 5 of the Proposed Memorandum. | |
| | | | |||
Classified Board (Organizational Documents Proposal B) | | | The Cayman Constitutional Documents provide that Waldencast’s board of directors shall be composed of one class. | | | The Proposed Constitutional Document provides that the Waldencast plc Board be divided into three classes, with each class made up of, as nearly as may be possible, one-third of the total number of directors constituting the entire Waldencast plc Board, with only one class of directors being elected in each year and each class serving a three-year term. |
| | | | |||
| | See Article 29 of the Existing Articles. | | | See Article 29 of the Proposed Articles. | |
| | | | |||
Changes Relating to the Investor Rights Agreement (Organizational Documents Proposal C) | | | The Cayman Constitutional Documents do not contain any provisions subject to any investor rights agreement. | | | The Proposed Constitutional Document provides that certain provisions will be subject to the Investor Rights Agreement, including provisions governing the appointment, removal and replacement of directors, with respect to which Cedarwalk will have certain rights pursuant to the Investor Rights Agreement. |
| | | | |||
| | | | See Article 29 of the Proposed Articles. |
| | Cayman Constitutional Documents | | | Proposed Constitutional Document | |
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Corporate Name (Organizational Documents Proposal D) | | | The Cayman Constitutional Documents provide that the name of the company is “Waldencast Acquisition Corp.” | | | The Proposed Constitutional Document provides that the name of the company will be “Waldencast plc.” |
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| | See paragraph 1 of the Existing Memorandum. | | | See paragraph 1 of the Proposed Memorandum. | |
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Existence for Unlimited Duration (Organizational Documents Proposal D) | | | The Cayman Constitutional Documents provide that if Waldencast does not consummate a business combination (as defined in the Cayman Constitutional Documents) by March 18, 2023, Waldencast will cease all operations except for the purposes of winding up and will redeem the public shares and liquidate Waldencast trust account. | | | The Proposed Constitutional Document provides that Waldencast plc is to have existence of unlimited duration. |
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| | See Article 49 of the Existing Articles. | | | See paragraph 3 of the Proposed Memorandum. | |
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Provisions Related to Status as Blank Check Company (Organizational Documents Proposal D) | | | The Cayman Constitutional Documents include various provisions related to Waldencast’s status as a blank check company prior to the consummation of a business combination. | | | The Proposed Constitutional Document does not include such provisions related to Waldencast’s status as a blank check company, which no longer will apply upon consummation of the Business Combination, as Waldencast plc will cease to be a blank check company at such time. |
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| | See Article 49 of the Existing Articles. | | |
Q: | How will the Domestication affect my ordinary shares, warrants and units? |
A: | As a result of and upon the effective time of the Domestication, (1) each of the then issued and outstanding Waldencast Class A ordinary shares will convert automatically, on a one-for-one basis, into a Waldencast plc Class A ordinary share, (2) each of the then issued and outstanding Waldencast Class B ordinary shares will convert automatically, on a one-for-one basis, into a Waldencast plc Class A ordinary share, (3) each then issued and outstanding Waldencast warrant will convert automatically into a Waldencast plc warrant, pursuant to the Warrant Agreement and (4) each of the then issued and outstanding units of Waldencast that have not been previously separated into the underlying Waldencast Class A ordinary shares and underlying Waldencast warrants upon the request of the holder thereof will be cancelled and will entitle the holder thereof to one Waldencast plc Class A ordinary share and one-third of one Waldencast plc warrant. See the section entitled “Domestication Proposal” for additional information. |
Q: | What are the U.S. federal income tax consequences of the Domestication? |
A: | As discussed more fully in “U.S. Federal Income Tax Considerations—Effects of the Business Combination to U.S. Holders,” Skadden, Arps, Slate, Meagher & Flom LLP has delivered an opinion that the Domestication will qualify as a “reorganization” within the meaning of Section 368(a)(l)(F) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). In accordance with such opinion, subject to the limitations and qualifications therein, U.S. Holders of Waldencast Class A ordinary shares will generally not recognize gain or loss for U.S. federal income tax purposes on the Domestication. Please see the section entitled “U.S. Federal Income Tax Considerations—Effects of the Business Combination to U.S. Holders” for additional information. |
Q: | Did the board of directors of Waldencast obtain a third-party valuation or fairness opinion in determining whether or not to proceed with the Business Combination? |
Q: | Do I have redemption rights? |
A: | If you are a holder of public shares, you have the right to request that we redeem all or a portion of your public shares for cash provided that you follow the procedures and deadlines described elsewhere in this proxy statement/prospectus. Public shareholders may elect to redeem all or a portion of the public shares held by them regardless of if or how they vote in respect of the BCA Proposal. If you wish to exercise your redemption rights, please see the answer to the next question: “How do I exercise my redemption rights?” |
Q: | How do I exercise my redemption rights? |
A: | If you are a public shareholder and wish to exercise your right to redeem the public shares, you must: |
• | (a) hold public shares, or (b) if you hold public shares through units, you elect to separate your units into the underlying public shares and public warrants prior to exercising your redemption rights with respect to the public shares; |
• | submit a written request to Continental, Waldencast’s transfer agent, that Waldencast plc redeem all or a portion of your public shares for cash; and |
• | deliver your public shares to Continental, Waldencast’s transfer agent, physically or electronically through The Depository Trust Company (“DTC”). |
Q: | If I am a holder of units, can I exercise redemption rights with respect to my units? |
A: | No. Holders of issued and outstanding units must elect to separate the units into the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If you hold your units in an account at a brokerage firm or bank, you must notify your broker or bank that you elect to separate the units into the underlying public shares and public warrants, or if you hold units registered in your own name, you must contact Continental, Waldencast’s transfer agent, directly and instruct them to do so. You are requested to cause your public shares to be separated and delivered to Continental, Waldencast’s transfer agent, by 5:00 p.m., Eastern Time, on July 21, 2022 (two business days before the extraordinary general meeting) in order to exercise your redemption rights with respect to your public shares. |
Q: | What are the U.S. federal income tax consequences of exercising my redemption rights? |
A: | The receipt of cash by a U.S. holder of Waldencast Class A ordinary shares in redemption of such shares will be a taxable transaction for U.S. federal income tax purposes. Please see the section entitled “U.S. Federal Income Tax Considerations—Effects to U.S. Holders of Exercising Redemption Rights” for additional information. You are urged to consult your tax advisors regarding the tax consequences of exercising your redemption rights. |
Q: | What happens to the funds deposited in the trust account after consummation of the Business Combination? |
A: | Following the closing of Waldencast’s initial public offering, an amount equal to $345.0 million ($10.00 per unit) of the net proceeds from Waldencast’s initial public offering and the sale of the private placement warrants (inclusive of the partial exercise by the underwriters of the over-allotment option) was placed in the trust account. As of March 31, 2022, funds in the trust account totaled $345.1 million and were comprised entirely of U.S. government treasury obligations with a maturity of 185 days or less or of money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S. government treasury obligations. These funds will remain in the trust account, except for the withdrawal of interest to pay taxes, if any, until the earliest of (1) the completion of a business combination (including the Closing), (2) the redemption of any public shares properly tendered in connection with a shareholder vote to amend the Cayman Constitutional Documents to modify the substance or timing of Waldencast’s obligation to redeem 100% of the public shares if it does not complete a business combination by March 18, 2023, or (3) the redemption of all of the public shares if Waldencast is unable to complete a business combination by March 18, 2023 (or if such date is further extended at a duly called extraordinary general meeting, such later date), subject to applicable law. |
Q: | What happens if a substantial number of the public shareholders vote in favor of the Obagi Merger Proposal and the Milk Transaction Proposal and exercise their redemption rights? |
A: | Our public shareholders are not required to vote in respect of the Business Combination in order to exercise their redemption rights. Accordingly, the Business Combination may be consummated even though the funds available from the trust account and the number of public shareholders are reduced as a result of redemptions by public shareholders. |
Q: | What conditions must be satisfied to complete the Business Combination? |
A: | The Obagi Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) approval of the Obagi Merger Agreement and related agreements and transactions by the respective shareholders of Waldencast and Obagi, (ii) effectiveness of the Registration Statement, (iii) expiration or termination of the waiting period under the HSR Act, (iv) receipt of approval for listing on Nasdaq of the Waldencast plc Class A ordinary shares to be issued in connection with the Obagi Merger, (v) that Waldencast have at least $5,000,001 of net tangible assets upon Closing (inclusive of the PIPE Investment Amount and the Forward Purchase Amount actually received by Waldencast prior to or substantially |
Q: | When do you expect the Business Combination to be completed? |
A: | It is currently expected that the Business Combination will be consummated in the first half of 2022. This date depends, among other things, on the approval of the proposals to be put to Waldencast shareholders at the extraordinary general meeting. However, such meeting could be adjourned if the Adjournment Proposal is adopted by Waldencast’s shareholders at the extraordinary general meeting and Waldencast elects to adjourn the extraordinary general meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals at the extraordinary general meeting. For a description of the conditions for the completion of the Business Combination, see the sections entitled “BCA Proposal — Obagi Merger Proposal — The Obagi Merger Agreement” and “BCA Proposal — Milk Transaction Proposal — The Milk Equity Purchase Agreement.” |
Q: | What happens if the Business Combination is not consummated? |
A: | Waldencast will not complete the Domestication to Jersey unless all other conditions to the consummation of the Business Combination have been satisfied or waived by the parties in accordance with the terms of the Transaction Agreements. If Waldencast is not able to complete the Business Combination with Obagi and Milk by March 18, 2023, and is not able to complete another business combination by such date, in each case, as such |
Q: | Do I have appraisal rights in connection with the proposed Business Combination and the proposed Domestication? |
A: | Neither Waldencast’s shareholders nor Waldencast’s warrant holders have appraisal rights in connection with the Business Combination or the Domestication under the Cayman Islands Companies Act or under the Jersey Companies Law. Under the Jersey Companies Law, dissenting shareholders of a Jersey company have no appraisal rights that would provide the right to receive payment in cash for the judicially determined fair value of the shares. However, under Jersey law, dissenting shareholders may, following the Domestication, object to the Royal Court of Jersey on the grounds they are unfairly prejudiced by the proposed Business Combination and the proposed Domestication. |
Q: | What do I need to do now? |
A: | Waldencast urges you to read this proxy statement/prospectus, including the Annexes and the documents referred to herein, carefully and in their entirety and to consider how the Business Combination will affect you as a shareholder or warrant holder. Waldencast’s shareholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card. |
Q: | How do I vote? |
A: | If you are a holder of record of ordinary shares on the Record Date for the extraordinary general meeting, you may vote in person at the extraordinary general meeting or by submitting a proxy for the extraordinary general meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the broker, bank or nominee with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting and vote in person, obtain a valid proxy from your broker, bank or nominee. |
Q: | If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me? |
A: | No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this proxy statement/prospectus may have been forwarded to you by your brokerage firm, bank or other nominee, or its agent, and you may need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker, bank or nominee as to how to vote your shares. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. We believe all the proposals presented to the shareholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker, or other nominee can vote your shares only if you provide instructions on how to vote. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares and you should instruct your broker to vote your shares in accordance with directions you provide. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not |
Q: | When and where will the extraordinary general meeting be held? |
Q: | Who is entitled to vote at the extraordinary general meeting? |
A: | The Waldencast board of directors has fixed May 27, 2022 as the Record Date for the extraordinary general meeting. If you were a shareholder of Waldencast at the close of business on the Record Date, you are entitled to vote on matters that come before the extraordinary general meeting. However, a shareholder may only vote his or her shares if he or she is present in person or is represented by proxy at the extraordinary general meeting. |
Q: | How many votes do I have? |
A: | Waldencast shareholders are entitled to one vote at the extraordinary general meeting for each ordinary share held of record as of the Record Date. As of the close of business on the Record Date for the extraordinary general meeting, there were 43,125,000 ordinary shares issued and outstanding, of which 34,500,000 were issued and outstanding public shares. |
Q: | What constitutes a quorum? |
A: | A quorum of Waldencast shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting if the holders of a majority of the issued and outstanding ordinary shares entitled to vote at the extraordinary general meeting are represented in person or by proxy. As of the Record Date for the extraordinary general meeting, 21,562,501 ordinary shares would be required to achieve a quorum. |
Q: | What vote is required to approve each proposal at the extraordinary general meeting? |
A: | The following votes are required for each proposal at the extraordinary general meeting: |
• | Obagi Merger Proposal: The approval of the Obagi Merger Proposal requires an ordinary resolution under the Cayman Constitutional Documents, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Milk Transaction Proposal: The approval of the Milk Transaction Proposal requires an ordinary resolution under the Cayman Constitutional Documents, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Domestication Proposal: The approval of the Domestication Proposal requires a special resolution under the Cayman Constitutional Documents and the Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Organizational Documents Proposals: The separate approval of each of the Organizational Documents Proposals A and D requires a special resolution under the Cayman Constitutional Documents and the Cayman Islands Companies Act, being the affirmative vote of holders of at least two-thirds of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting and the separate approval of each of the Organizational Documents Proposals B and C requires an ordinary resolution under the Cayman Constitutional Documents and the Cayman Islands Companies Act, being the affirmative vote of holders of at least a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Director Election Proposal: The approval of the Director Election Proposal requires an ordinary resolution of the holders of Waldencast Class B ordinary shares under the Cayman Constitutional Documents, such holders being the Sponsor and the Investor Directors, being the affirmative vote of a majority of the Waldencast Class B ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Stock Issuance Proposal: The approval of the Stock Issuance Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Milk Issuance Proposal: The approval of the Milk Issuance Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Incentive Award Plan Proposal: The approval of the Incentive Award Plan Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
• | Adjournment Proposal: The approval of the Adjournment Proposal requires an ordinary resolution under Cayman Islands law, being the affirmative vote of a majority of the ordinary shares represented in person or by proxy and entitled to vote thereon and who vote at the extraordinary general meeting. |
Q: | What are the recommendations of Waldencast’s board of directors? |
A: | Waldencast’s board of directors believes that the Obagi Merger Proposal, the Milk Transaction Proposal and the other proposals to be presented at the extraordinary general meeting are in the best interest of Waldencast’s shareholders and unanimously recommends that its shareholders and, in the case of the Director Election Proposal, its shareholders holding Waldencast Class B ordinary shares, vote “FOR” the Obagi Merger Proposal, “FOR” the Milk Transaction Proposal, “FOR” the Domestication Proposal, “FOR” each of the separate Organizational Documents Proposals, “FOR” the Director Election Proposal, “FOR” the Stock Issuance Proposal, “FOR” the Milk Issuance Proposal, “FOR” the Incentive Award Plan Proposal and “FOR” the Adjournment Proposal, in each case, if presented to the extraordinary general meeting. |
Q: | How does the Sponsor intend to vote their shares? |
A: | The Sponsor and the Investor Directors have agreed to vote in favor of the Business Combination, regardless of how our public shareholders vote. Unlike some other blank check companies in which the initial shareholders agree to vote their shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial business combination, the Sponsor and the Investor Directors have agreed to, among other things, vote in favor of the Transaction Agreements and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Obagi Sponsor Support Agreement and the Milk Sponsor Support Agreement, and waive their redemption rights in connection with the consummation of the Business Combination with respect to any ordinary shares held by them as contemplated by the Letter Agreement. The ordinary shares held by the Sponsor will be excluded from the pro rata calculation used to determine the per-share redemption price. As of the date of this proxy statement/prospectus, the Sponsor and Investor Directors own 20% of the issued and outstanding ordinary shares. |
Q: | What happens if I sell my Waldencast ordinary shares before the extraordinary general meeting? |
A: | The Record Date for the extraordinary general meeting is earlier than the date of the extraordinary general meeting and earlier than the date that the Business Combination is expected to be completed. If you transfer your public shares after the applicable Record Date, but before the extraordinary general meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such general meeting but the transferee, and not you, will have the ability to redeem such shares (if time permits). |
Q: | May I change my vote after I have mailed my signed proxy card? |
A: | Yes. Shareholders may send a later-dated, signed proxy card to Waldencast’s Secretary at Waldencast’s address set forth below so that it is received by Waldencast’s Secretary prior to the vote at the extraordinary general meeting (which is scheduled to take place on July 25, 2022) or attend the extraordinary general meeting in person and vote. Shareholders also may revoke their proxy by sending a notice of revocation to Waldencast’s Secretary, which must be received by Waldencast’s Secretary prior to the vote at the extraordinary general meeting. However, if your shares are held in “street name” by your broker, bank or another nominee, you must contact your broker, bank or other nominee to change your vote. |
Q: | What happens if I fail to take any action with respect to the extraordinary general meeting? |
A: | If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is approved by shareholders and the Business Combination is consummated, you will become a shareholder or warrant holder of Waldencast plc. If you fail to take any action with respect to the extraordinary general meeting and the Business Combination is not approved, you will remain a shareholder or warrant holder of Waldencast. However, if you fail to vote with respect to the extraordinary general meeting, you will nonetheless be able to elect to redeem your public shares in connection with the Business Combination (if time permits). |
Q: | What should I do with my share certificates, warrant certificates or unit certificates? |
A: | Our shareholders who exercise their redemption rights must deliver (either physically or electronically) their share certificates to Continental, Waldencast’s transfer agent, prior to the extraordinary general meeting. |
Q: | What should I do if I receive more than one set of voting materials? |
A: | Shareholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your ordinary shares. |
Q: | Who will solicit and pay the cost of soliciting proxies for the extraordinary general meeting? |
A: | Waldencast will pay the cost of soliciting proxies for the extraordinary general meeting. Waldencast has engaged Morrow to assist in the solicitation of proxies for the extraordinary general meeting. Waldencast has agreed to pay Morrow a fee of $37,500, plus disbursements (to be paid with non-trust account funds). Waldencast will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of Waldencast Class A ordinary shares for their expenses in forwarding soliciting materials to beneficial owners of Waldencast Class A ordinary shares and in obtaining voting instructions from those owners. Waldencast’s directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the internet or in person. They will not be paid any additional amounts for soliciting proxies. |
Q: | Where can I find the voting results of the extraordinary general meeting? |
A: | The preliminary voting results will be expected to be announced at the extraordinary general meeting. Waldencast will publish final voting results of the extraordinary general meeting in a Current Report on Form 6-K within four business days after the extraordinary general meeting. |
Q: | Who can help answer my questions? |
A: | If you have questions about the Business Combination or if you need additional copies of the proxy statement/prospectus, any document incorporated by reference in this proxy statement/prospectus or the enclosed proxy card, you should contact: |
(A) | Organizational Documents Proposal A — to authorize the change in the authorized share capital of Waldencast from 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 preferred shares, par value $0.0001 per share (the “Waldencast preferred shares”), to 1,000,000,000 Class A ordinary shares, par value $0.0001 per share, of Waldencast plc, 100,000,000 Class B ordinary shares, par value $0.0001 per share, of Waldencast plc and 25,000,000 preference shares of a par value of $0.0001 per share of Waldencast plc (“Organizational Documents Proposal A”); |
(B) | Organizational Documents Proposal B — to provide that the Waldencast plc Board be divided into three classes, with each class made up of, as nearly as may be possible, one-third of the total number of directors constituting the entire Waldencast plc Board, with only one class of directors being elected in each year and each class serving a three-year term (“Organizational Documents Proposal B”); |
(C) | Organizational Documents Proposal C — to provide that certain provisions of the Proposed Constitutional Document will be subject to the Investor Rights Agreement, including provisions governing the appointment, removal and replacement of directors, with respect to which Cedarwalk will have certain rights pursuant to the Investor Rights Agreement (“Organizational Documents Proposal C”); |
(D) | Organizational Documents Proposal D — to authorize all other changes in connection with the replacement of Cayman Constitutional Documents with the Proposed Constitutional Document in connection with the consummation of the Business Combination (a copy of which is attached to this proxy statement/prospectus as Annex G), including (1) changing the corporate name from “Waldencast Acquisition Corp.” to “Waldencast plc,” (2) making Waldencast plc’s existence for an unlimited duration and (3) removing certain provisions related to Waldencast plc’s status as a blank check company that will no longer be applicable upon consummation of the Business Combination, all of which Waldencast’s board of directors believes is necessary to adequately address the needs of Waldencast plc after the Business Combination (“Organizational Documents Proposal D”); |
• | Large and Resilient Addressable Market. The beauty, personal care and wellness market has proven to be resilient through economic cycles and, in particular, is expected to maintain strong momentum in its growth following the COVID-19 lockdowns, with estimated year-on-year growth of 8.4% in 2021, and 6.4% for 2022 and 2023, according to industry sources. |
• | Highly Fragmented Market with Growth Driven by Independent Brands. New consumer trends and technology are driving the gain in market share of disruptor brands that account for the other 68% of the global beauty, personal care and wellness market. These emerging brands are driving sector growth and the Waldencast board of directors believes there is a clear opportunity to aggregate these brands under a new platform to accelerate growth and scale. |
• | Obagi is a Market Leader Within the Professional Skincare Market. Obagi is a market leader in the global professional skincare market, having achieved the highest overall scores from U.S. providers in the 2020 Kline Perception and Satisfaction Survey, receiving the highest performance ratings on most attributes among large brands including marketing, product portfolio and innovation, and value-added services.1 |
• | Obagi’s Robust, Innovative Product Portfolio. Obagi currently holds over 80 patents worldwide in respect of its products, which are developed by a world class research and development team, and undergo rigorous product testing from panels comprising leading dermatologists from universities and research organizations across the U.S. Over 90% of Obagi’s sales are derived from skincare products designed for the physician-dispensed market, ranging in price from $22.00 to $471.00. |
• | Obagi’s Experienced Management Team of Dermo-Cosmetics Experts. The Waldencast board of directors believes that Obagi’s management team has extensive experience in key aspects of the beauty, personal care and wellness market, particularly the dermo-cosmetics sector. For additional information regarding Obagi’s executive officers, see the section entitled “Management of Waldencast plc Following the Business Combination — Executive Officers.” |
• | Milk’s Leading Clean Make-Up Brand. Milk is a leading clean make-up brand with a strong following among Gen-Z consumers, known for its cultural relevance and iconic products. The brand is anchored by this strong community following and the Waldencast board of directors believe there are significant growth opportunities. |
• | Milk’s Strong Community Engagement and Portfolio of Innovative Products. We believe Milk has an exciting portfolio of innovative and iconic products and a strong community following attracted to its brand values of “good for you, good for the planet, and good for our community.” |
• | Milk’s Strong Partnership with Sephora. milkmakeup.com currently only ships to the U.S. and the Waldencast board of directors believes there is an opportunity to increase Milk’s presence in high-growth international markets, through increasing Milk’s presence in Sephora’s non-North American brick and mortar stores, as well as partnerships with other beauty retail stores worldwide. |
• | Milk’s Experienced Management Team of Make-Up and Cosmetic Industry Experts. The Waldencast board of directors believes that Milk’s management team has extensive experience in key aspects of the beauty, personal care and wellness sectors, particularly the make-up and cosmetics sectors. We expect that Milk |
1 | 2020 Physician Dispensed Skincare US Perception & Satisfaction Survey, Kline & Company. |
• | Attractive Entry Valuations. The Waldencast board of directors determined that (a) the pro forma enterprise valuations of Obagi and Milk were reasonable in comparison to certain comparable, publicly traded companies and (b) Waldencast plc will have an anticipated initial pre-transaction enterprise value of $1,200.0 million, implying a 4.8x multiple of 2022 projected revenue. |
• | Potential Inability to Complete the Obagi Merger and Milk Transaction. The Waldencast board of directors considered the possibility that the Obagi Merger and/or the Milk Transaction and, thereby, the Business Combination, may not be completed and the potential adverse consequences to Waldencast if the Business Combination is not completed, in particular the expenditure of time and resources in pursuit of the Business Combination and the loss of the opportunity to participate in the transaction. They considered the uncertainty related to the Closing, including due to closing conditions primarily outside of the control of the parties to the transaction (such as the need for shareholder and antitrust approval). |
• | Obagi and Milk’s Business Risks. The Waldencast board of directors considered that Waldencast shareholders would be subject to the execution risks associated with Waldencast plc if they retained their public shares following the Closing, which were different from the risks related to holding public shares of Waldencast prior to the Closing. In this regard, the Waldencast board of directors considered that there were risks associated with successful implementation of Waldencast plc’s long-term business plan and strategy and Waldencast plc realizing the anticipated benefits of the Business Combination on the timeline expected or at all, including due to factors outside of the parties’ control such as the potential negative impact of the COVID-19 pandemic and related macroeconomic uncertainty. |
• | Implementation Complexities. Although a simultaneous business combination with two target entities is consistent with Waldencast’s objective of establishing a global, multi-brand beauty and wellness platform, the Waldencast board of directors considered the potential added complexity of implementation of the proposed Business Combination. |
• | Post-Business Combination Corporate Governance. The Waldencast board of directors considered the corporate governance provisions of the Transaction Agreements, the Investor Rights Agreement and the Proposed Constitutional Documents and the effect of those provisions on the governance of Waldencast plc following the Closing. |
• | No Survival of Remedies for Breach of Representations, Warranties or Covenants of Obagi or Milk. The Waldencast board of directors considered that the terms of the Transaction Agreements provide that Waldencast will not have any surviving remedies against Obagi, Milk or their stockholders after the Closing to recover for losses as a result of any inaccuracies or breaches of the Obagi and Milk representations, warranties or covenants set forth in the Transaction Agreements. |
• | Litigation. The Waldencast board of directors considered the possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could enjoin consummation of the Business Combination. For further details, see the section entitled “Risk Factors — Risks Related to Milk — Risks Related to Legal and Regulatory Proceedings — We are involved, and may become involved in the future, in disputes and other legal or regulatory proceedings, including an ongoing legal proceeding involving our founders, that, if adversely decided or settled, could materially and adversely affect our business, financial condition and results of operations.” |
• | Fees and Expenses. The Waldencast board of directors considered the fees and expenses associated with completing the Business Combination. |
• | Diversion of Management. The Waldencast board of directors considered the potential for diversion of management and employee attention during the period prior to the completion of the Business Combination, and the potential negative effects on Obagi and Milk’s businesses. |
• | Interests of Waldencast’s Directors and Executive Officers. Waldencast’s directors and executive officers may have interests in the Business Combination as individuals that are in addition to, and may be different from, the interests of Waldencast’s shareholders, as described in the section entitled “BCA Proposal — Interests of Waldencast’s Directors and Executive Officers in the Business Combination.” |
| | Assuming No Redemptions | | | Assuming 30% Redemptions | | | Assuming 66% Redemptions | | | Assuming 90% Redemptions | | | Assuming Maximum Redemptions(1) | ||||||||||||||||
| | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | | | Shares | | | Ownership %(11) | |
Waldencast Public Shareholders | | | 34,500,000 | | | 26.8% | | | 24,150,000 | | | 20.4% | | | 11,789,186 | | | 10.4% | | | 3,450,000 | | | 3.3% | | | 1,790,809 | | | 1.7% |
Burwell Mountain Trust(2) | | | 7,848,333 | | |