Galderma to buy ZO Skin Health from Blackstone for $1.5 billion

Galderma has signed an agreement to acquire ZO Skin Health in a deal valued at $1.5 billion. The Swiss-based dermatology group will take 100% of the physician-dispensed brand, which was founded by dermatologist Dr Zein Obagi and is based in Irvine, California.

The transaction is all-cash, funded through existing cash reserves and bank financing, and is subject to regulatory approvals and customary closing conditions. Galderma expects the deal to close in the fourth quarter of 2026 or in early 2027, and has not named a firmer date.

ZO Skin Health's sellers include funds managed by Blackstone through its Tactical Opportunities segment, alongside the Obagi family. Shary Moalemzadeh, a senior managing director at Blackstone, said the firm was proud to have partnered with Dr Obagi while the company more than doubled its revenue.

The brand posted net sales of approximately $330 million in the 12 months to June 2026. Its portfolio spans more than 40 products sold through a network of over 16,500 physicians, medical spas and online accounts across more than 40 countries.

ZO Skin Health was founded in 2007 and delivers protocol-based daily care built on clinical science, so it has traded for almost two decades. Its regimens centre on retinol- and acid-based formulations, which Galderma said complement the peptide-based regenerative pre- and post-procedure offering of its Alastin brand.

Galderma's portfolio spans injectable aesthetics, dermatological skin care and therapeutic dermatology. Its dermatological skin care arm is built around two flagship brands, Cetaphil and Alastin, and ZO Skin Health will join them, supporting its role as a partner of choice for dermatologists, plastic surgeons and aesthetic professionals.

Why Galderma is paying up

Chief executive Flemming Ørnskov called the deal another step toward building the world's most innovative dermatology portfolio. "ZO Skin Health brings strong clinical credentials, a distinctive protocol-based approach, and a trusted position among dermatologists and plastic surgeons," he said.

Ørnskov said Galderma sees significant opportunities to reignite ZO Skin Health's growth through investment in innovation and commercial reach. With its injectable aesthetics and dermatological skin care businesses, he said, Galderma is positioned to compete for and win growth in the fast-growing medical-grade segment.

The dermocosmetics category has expanded sharply since the pandemic. Sales doubled between 2019, when the segment generated about €14.3 billion, and 2024, when it reached roughly €28.2 billion, up 7.8% on the year, according to L'Oréal estimates.

That growth ran two percentage points faster than the overall beauty market, by the same L'Oréal estimates. The potential remains large: approximately 2.1 billion people worldwide suffer from a skin care pathology.

Founder Zein Obagi said he had long admired Galderma for its complete dedication to dermatology and its partnership with healthcare professionals. "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," he said.

"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," Obagi added.

The financial arithmetic

Galderma plans to raise commercial investment in ZO Skin Health during its first year of ownership, aiming to set up renewed growth from the second year after closing. Lazard is lead financial adviser, with JP Morgan as financial adviser and Ropes & Gray as legal adviser.

Galderma said the acquisition is expected to be slightly dilutive to its core EBITDA margin in 2027, with a margin broadly in line with the group's average from 2028 onward. It added that the deal should be core EPS neutral in the first full year following closing.

Galderma also said the purchase is in line with its commitment to a solid investment grade credit rating. It has not said how much of the $1.5 billion comes from bank financing and how much from cash reserves.

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Images: Galderma; ZO Skin Health Exfoliating Polish Courtesy of ZO Skin Health