Galderma agrees to buy ZO Skin Health in $1.5 billion deal

what happened

Swiss skincare company Galderma has agreed to acquire ZO Skin Health, an Irvine, California firm, at an enterprise value of $1.5 billion. Galderma said the purchase would widen its dermatology skincare range in a segment that is growing quickly and is sold through physicians, and would help ZO Skin Health move into its next stage of expansion.

The Wall Street Journal reported that the deal is all-cash and will be financed from cash reserves and bank loans, and that the $1.5 billion figure includes debt. ZO Skin Health was founded in 2007 by dermatologist Zein Obagi. Its current owners include funds managed by Blackstone, the Obagi family and other shareholders. Revenue more than doubled to $330 million in the year to June 30, as the company grew under Blackstone's majority stake, taken in 2020.

why it matters

Galderma expects the deal to dilute its core EBITDA margin next year, with margins returning to average levels from 2028 onward. In the first full year after closing, the acquisition is expected to be neutral to core earnings per share. Completion depends on regulatory approvals. For markets, the deal is another sign of consumer skincare makers expanding in premium segments, a field where Galderma generated $5.2 billion in sales last year.

instruments