Skincare solutions provider The Beauty Health Company (SKIN) is expanding its international footprint by acquiring four distributors in Germany, Australia, France, and Mexico for a total consideration of $35 million. The purchases are expected to be accretive to BeautyHealth’s bottom line and have either closed or expected to close in June.
Of the total consideration, $28 million is in cash, and the rest in Class A shares of BeautyHealth, indicating a 20% average seller equity rollover across the four purchases. Additionally, BeautyHealth will issue about 7.5 million common shares to previous owners of its flagship brand HydraFacial per an earnout provision in the merger agreement of May 2021.
These acquisitions are part of HydraFacial’s strategy to expand its global market. The brand is present in 87 countries.
BeautyHealth CEO Clint Carnell said, “This direct model approach brings us closer to both our providers and our consumers around the world, leading to more opportunities for direct engagement and creative experiences that drive brand awareness.” (See Beauty Health stock chart on TipRanks)
Carnell added, “We have seen the successful testing case with our earlier acquisition of a former distributor in the UK and plan to continue to build on our scaling and marketing capability globally.”
On June 23, Piper Sandler analyst Erinn Murphy initiated coverage on the stock with a Buy rating and a price target of $24 (36.4% upside potential).
Murphy sees BeautyHealth benefitting from growing interest in skincare and medical device technology. Also, the shift from invasive beauty procedures to lower-cost, non-invasive treatments bodes well for the company.
Based on 3 unanimous Buys, consensus on the Street is a Strong Buy. The average Beauty Health analyst price target of $20.83 implies 18.3% upside potential. Shares have gained 62.4% over the past year.
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