Waldencast Acquisition, a special purpose acquisition company, and its wholly-owned subsidiary, Waldencast Finco Limited, entered into a credit agreement that features $225 million in term loan and revolving credit facilities as part of a total package of $1.02 billion in aggregate proceeds. The credited agreement was entered into by Waldencast Finco as the borrower, Waldencast Partners as the parent guarantor, the lenders party thereto and JPMorgan Chase Bank as administrative agent. Credit Suisse acted as documentation agent and JPMorgan Chase Bank, Banco Santander and Wells Fargo Securities acted as joint bookrunners and joint lead arrangers under the Waldencast credit agreement.
As a result of the entry into the Waldencast credit agreement, Waldencast will receive aggregate proceeds of up to approximately $1.02 billion (if no Waldencast shareholders exercise their rights to redeem their shares). This includes, in addition to the $225 million debt facility described above, the following commitments:
Forward purchase agreements with Burwell Mountain Trust, Dynamo Master Fund (each members of Waldencast Long-Term Capital, Waldencast’s sponsor) and Beauty Ventures in the aggregate total amount of $333 million.
PIPE commitments with certain PIPE investors in the aggregate total amount of $113 million.
Waldencast’s SPAC proceeds of $345 million (if no Waldencast shareholders exercise their right to redeem their shares).
“We are pleased to enter into a new credit agreement which reflects the strength of our business model, cash flow generation and ability to generate long term profitable growth,” Michel Brousset, Waldencast founder and CEO, said. “Interest expense associated with the Waldencast credit agreement will represent approximately half of the borrowing cost of the existing credit agreements, and accordingly, an encouraging expression of confidence by an outstanding group of first-tier financial institutions. We thank JPMorgan, Banco Santander, Wells Fargo and Credit Suisse for their support.”
The Waldencast credit agreement provides for a four-year secured first-lien term loan facility in an aggregate principal amount of $175 million and revolving loan facility in an aggregate principal amount of up to $50 million (of which an aggregate principal amount of up to $7.5 million will be available, at the borrower’s option, to be drawn in the form of letters of credit). The initial borrowings under the Waldencast credit agreement will be subject to negotiated limited conditions precedent and are expected to become available on the funding date.
Proceeds from the borrowings under the Waldencast credit facilities may be used to: pay the cash consideration due to the equity holders of Milk Makeup and Obagi Skin Care upon consummation of the transactions contemplated by the transaction agreements, repay in full all outstanding amounts under, and terminate, the existing credit agreements and fund working capital needs or other general corporate purposes of Waldencast.