By Amara Osei

Galderma will pay $1.5 billion in cash for ZO Skin Health, the physician-dispensed skin care brand founded by dermatologist Dr. Zein Obagi. Galderma announced the agreement to acquire 100 percent of the company from shareholders including funds managed by Blackstone through its Tactical Opportunities segment and the Obagi family.

The deal is expected to close in the fourth quarter of this year or in early 2027.

What does ZO Skin Health bring?

ZO Skin Health, based in Irvine, Calif., posted net sales of about $330 million in the 12 months to June. Its portfolio spans more than 40 products, sold through a network of over 16,500 physicians, medical spas and online accounts in more than 40 countries.

The brand centers on retinol- and acid-based protocols. Galderma calls that complementary to Alastin, its peptide-based regenerative pre- and post-procedure line. Galderma's Dermatological Skincare portfolio also includes Cetaphil.

"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," Ornoskov 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."

How big is the dermocosmetics market?

The category has doubled since the pandemic's start. Sales grew from about 14.3 billion euros in 2019 to about 28.2 billion euros in 2024, up 7.8 percent on-year, according to L'Oréal estimates — growth 2 percentage points faster than the overall beauty market.

Approximately 2.1 billion people worldwide suffer from a skin care pathology, Galderma noted.

What did Dr. Obagi and Blackstone say?

"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."

"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."

What happens after closing?

Galderma plans to increase commercial investment in ZO Skin Health during its first year of ownership, then strengthen the foundation for renewed growth starting in the second year after closing. The company said the transaction is expected to be slightly dilutive to its core EBITDA margin in 2027 and to reach 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, Galderma said, and consistent with its commitment to a solid investment grade credit rating.

Galderma will fund the all-cash transaction through cash reserves and bank financing. The price equals roughly 4.5 times ZO Skin Health's trailing net sales — a bet that Galderma can convert a 16,500-provider network and a doubling dermocosmetics market into its next growth engine.