Haitong International fund completes takeover of Obagi Medical

Haitong International fund buys Obagi Medical Products from Valeant

HAITONG International Securities Group’s fund, the Haitong International Zhonghua Finance Acquisition Fund I L.P., has completed the acquisition of Obagi Medical Products, a US professional beauty brand owned by the US-listed Valeant Pharmaceuticals International Inc.

Haitong International acted as the financial advisor of the acquisition, fund manager and financing consultant, in alliance with the limited partners of the fund to complete the deal. The total consideration of the acquisition was US$190 million, much lower than the cost of US$430 million Valeant paid for the privatization of Obagi in 2013.

Obagi, a US drug and cosmetic brand, develops and sells prescription and over-the-counter skin care products. In 2015, Obagi’s sales topped in the US and the company has been ranked No. 1 in the US for prescription medical skincare products for 20 consecutive years, according to industry researcher Kline. Obagi’s products are offered in more than 40 countries and regions across North America, Central and South America, Europe, the Middle East, and Asia.

This deal is Haitong International’s first asset acquisition project in the US. The fund was established specifically to facilitate the acquisition, which is a solution from Haitong International’s leveraged and acquisition finance (LAF) business division. LAF played a leading a role throughout the transaction, including formulating the deal structure at an earlier stage, setting up the fund, introducing strategic investors and syndicated financing, managing the fund, and developing an exit plan after completion of the deal.

As the financial advisor, Haitong International navigated the negotiation and progress of the deal, and successfully brought in strategic investors, including China Regenerative Medicine International Limited as a limited partner. China Regenerative Medicine International mainly focuses on three major business segments, namely tissue engineering, cell therapy and cosmetics. In addition to its investment in the fund, China Regenerative Medicine International will also assist Obagi in exploring China and other Asia-Pacific markets as the strategic partner.

In 2017, Haitong International completed a number of mid- and large-sized cross-border mergers and acquisitions, acting as the financial advisor of the sellers or buyers. The deals include Oceanwide Holdings International Financial Development Co. Ltd.’s acquisition of Quam Limited (the company has been renamed as China Oceanwide International Financial Ltd.), the sale of Macau’s Novo Bank Asia, China’s Gangtai Group’s acquisition of Buccellati, an Italian jewellery and watch company, and China Zhongwang Holdings Ltd.’s acquisition of an Australian luxury yacht builder Silver Yachts.