Channing Tatum, Guggenheim Back Manscaped’s $1 Billion SPAC Deal

(Bloomberg) -- Manscaped, a startup specializing in below-the-waist men’s grooming products, plans to go public through a merger with a special purpose acquisition company that values the combined entity at about $1 billion. 

The transaction with Bright Lights Acquisition Corp. will help five-year-old Manscaped extinguish debt and fund potential acquisitions, founder and Chief Executive Officer Paul Tran said in an interview. 

“We’ll be in a position to accelerate growth, to invest in product development as we take care of men from head to toe,” Tran said, adding that San Diego, California-based Manscaped intends to expand beyond the 38 countries where it already does business. 

Investors have committed to a $75 million private investment in public equity, or PIPE, according to Bright Lights CEO Michael Mahan. It’s priced at $9.20 a share, representing an appropriate “illiquidity discount” to compensate investors for locking up capital in coming months, he said. 

PIPE investors include actor Channing Tatum, Endeavor Group Holdings Inc., Signia Venture Partners, Saban Capital Group, Guggenheim Investments, and funds managed by UBS O’Connor. Existing Manscaped shareholders are expected to own about 72% of the combined company. 

Manscaped, which is profitable, chose to merge with Bright Lights in part because executives at the blank-check firm have “unparalleled experience with celebrity partnerships,” which it wouldn’t have been able to access via a traditional initial public offering, Tran said. 

Bright Lights co-Chairmen John Howard and Allen Shapiro previously invested in brands such as Aviation Gin, backed by Ryan Reynolds, as well as Skims, founded by Kim Kardashian, Mahan said.

Manscaped generated $285 million of revenue in the 12 months through September on just $23 million of equity funding, which Mahan called an “extraordinary achievement.” It projects revenue to top $500 million in 2023.

The company expects the transaction to be completed in the first quarter and that it will will be listed on Nasdaq under the ticker symbol MANS.

The startup sells products -- including trimmers it calls the Lawn Mower -- directly to consumers and through major major marketplaces, including Amazon.com Inc.’s, as well as retailers such as Target Corp. and Best Buy Co., Tran said, noting that its subscription business has been growing. Manscaped has ambitions to innovate beyond groin-related personal care, though Tran declined to elaborate.

The company separately has a “We Save Balls” partnership with the Testicular Cancer Society, designed to promote awareness of the disease and encourage self-screening for early detection, he said.

Bloomberg reported on the merger talks between Manscaped and Bright Lights in July.

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