PARIS – Galderma is delving deeper into the dermatological skin care category as it agrees to acquire ZO Skin Health for $1.5 billion from its shareholders that include funds managed by Blackstone through its Tactical Opportunities segment and the Obagi family.
The acquisition of 100 percent of ZO Skin Health will be made in an all-cash transaction and funded through cash reserves and bank financing. The deal is expected to close in the fourth quarter of this year or in early 2027.
ZO Skin Health, founded by dermatologist Dr. Zein Obagi, is a leading physician-dispensed skin care brand founded on clinical science and protocol-based daily care. It is based in Irvine, Calif.
ZO Skin Health’s portfolio includes more than 40 products, which are sold through a network of over 16,500 physicians, medical spas and online accounts in more than 40 countries.
In the 12 months to June, ZO Skin Health posted net sales of about $330 million.
“This acquisition is another important step towards building the world’s most innovative dermatology portfolio, strengthening our offering in an area where we already have significant capabilities,” said Flemming Ornoskov, chief executive officer of Galderma, in a statement. “ZO Skin Health brings strong clinical credentials, a distinctive protocol-based approach and a trusted position among dermatologists and plastic surgeons.
“We see significant opportunities to reignite its growth through investment in innovation and commercial reach,” he continued. “With our Dermatological Skincare and Injectable Aesthetic businesses, Galderma is strategically positioned to compete for and win the attractive growth opportunities in the fast-growing medical-grade skin care segment.”
The dermocosmetics category has posted exponential growth since the coronavirus pandemic’s start. The segment doubled its sales between 2019, when it generated about 14.3 billion euros, to about 28.2 billion euros in 2024, up 7.8 percent on-year – growth and 2 percentage points faster than the overall beauty market, according to L’Oréal estimates.
The potential remains huge, with approximately 2.1 billion people worldwide suffering from a skin care pathology.
Galderma’s Dermatological Skincare portfolio includes the Cetaphil and Alastin brands. ZO Skin Health’s portfolio is centered on retinol- and acid-based protocols, making it complementary to Alastin’s peptide-based regenerative pre- and post-procedure offering, according to Galderma.
“Together, the brand will enable Galderma to better serve health-care professionals and their patients,” Galderma said.
“Galderma is an organization I have long admired for its complete dedication to dermatology and its partnership with healthcare professionals around the world,” Obagi said. “ZO Skin Health has been my life’s work, and I could not be prouder to see it join a company that shares our commitment to science and the providers who trust us every day. I am confident we have found a home where our philosophy will endure and grow for the benefit of dermatologists, plastic surgeons, aestheticians and the patients we serve.”
Galderma plans to increase commercial investment into ZO Skin Health during its first year of ownership then to strengthen the foundation for renewed growth starting in the second year after the closing. Galderma said the transaction is expected to be slightly dilutive to its core EBITDA margin in 2027 and to achieve a margin broadly in line with its average from 2028 onward.
“The acquisition is expected to be core EPS neutral in the first full year following closing and to be in-line with Galderma’s commitment as a solid investment grade credit rating,” Galderma said.
“We are proud to have partnered with Dr. Obagi and the ZO Skin Health team during an important period of growth when the company more than doubled its revenue,” said Shary Moalemzadeh, senior managing director at Blackstone. “We thank them for their dedication and are confident ZO Skin Health is well positioned to continue advancing its mission moving forward together with Galderma.”