March 22, 2021- On today’s podcast, we welcome special guest Clint Carnell, CEO of The HydraFacial Company, a category-creating beauty health company. HydraFacial recently announced a merger with SPAC Vesper Healthcare Acquisition in a $1.1 billion deal. 

On the podcast, Clint discusses:

  • The main appeal of the healthcare industry and the aesthetics segment specifically
  • Details behind HydraFacial’s “razors + razorblades” business model
  • Surviving the pandemic as a PE-backed company
  • Why he chose Vesper founder Brent Saunders as a partner in their SPAC merger
  • Global growth opportunities available to HydraFacial
  • And more

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Welcome investors to the Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies. Your hosts Julian Klymochko and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at


Julian Klymochko: Welcome Clint to the Absolute Return Podcast. Really excited to have you on the show today, a ton going on at the HydraFacial company, super excited for you guys. And we definitely want to get into some of the intricacies and the details on your announced business combination with Vesper healthcare, been a long-time follower of Brent Saunders, so was excited to take a look at the deal he put together, and it’s looking like a winner so far, but prior to getting into that, you’ve had quite the long career in healthcare. Effectively dedicating your entire career to this sector, including stints at Bausch Lomb, Covidien. Can you walk us through a bit of your career history and how ultimately you became the CEO of the HydraFacial company a few years?


Clint Carnell: Sure, thanks Julian. And really a pleasure to be here. So, thanks for your interest in the company. Yeah, I came through my twenties, sales and marketing, progressive positions of responsibility. Primarily in ophthalmology, worked for Johnson & Johnson, Kyron Vision, and then was an M&A guy at Gambro Healthcare. Got my executive chops at Bausch Lomb from 2000 to 2005 where I led the U.S. surgical business. Which was a cataract, refractive, vitreoretinal, really exciting time as LASIK was just hitting the marketplace. In 05, I was running a pretty substantial part of Bausch Lomb, but I really wanted to run these businesses, not be a professional manager of one. And so, I joined a small company called Thermage at the time, you know, doing 22 million in revenue. We took that public in 06, renamed it Solta Medical and created some of the well-known brands in the space today. Thermage, Fraxel, [Inaudible 00:01:44]


Got my first CEO gig, which was the typical venture capital, no revenue, you know, go back into the R&D place and learn how this stuff really works. And Covidien picked me up and I guess it was around 14, Joe Almeida was a CEO and he was looking to get into aesthetics and it was really formative for me because I was the, you know, the CEO in residence, we were just getting ready to pull the trigger on a couple of assets and get into aesthetics. I was going to be CEO of that group and Medtronic bought them and they didn’t want to be in aesthetics. So, it was a kind of an interesting way that I got back into aesthetics. I actually opened up with a partner, a chain of aesthetic centers. But more importantly, came back to a HydraFacial in I guess July of 16 when two of our private equity partners asked me to do due diligence on the asset at the time. And that’s how I got back here. I was living overseas. They asked me to look at the asset and when we won the asset in December of 16, I’ve been running the company ever since. And it’s been just a fantastic journey so far.


Julian Klymochko: That’s great to hear. And it’s notable given Brent Saunders interest in the company. And, you know, he is famously having former CEO of Allergan of Botox fame. So, he definitely knows the industry. And I thought it was notable how he indicated that a HydraFacial company was his first call once he got a Vesper up and running, so that’s super interesting. But prior to getting into that, what was it specifically that appealed to you about the healthcare industry in general and then the aesthetics business that you ultimately came to focus on?


Clint Carnell: Yeah, for some reason I love healthcare, you know, I’m fairly analytical. I’ve always enjoyed working with surgeons. They tend to be incredibly bright, incredibly driven. And so, it’s just a really natural business partner for me. And I think that’s why I’ve always liked ophthalmology, plastic surgery, dermatology. Three of the top, top ones. I would say I like aesthetics a lot more because you’re not restrained with all of the government reimbursement. It’s a cash pay, so what I love about aesthetics is you get the best of business. You know, it’s an honest transaction, you get a service or a product and you pay for that. And so, all of the elements of traditional business exist, you have to have a great experience when you’re dealing with your customers. And then it’s also in the healthcare field. So, plastics, derm, medical, spas, there are a lot of fun to work with. So, for me, it gives me the creativity of being a business person without, you know, restraints around insurance. But also keeps you in a really stimulating intellectual field with really, really smart people.


Julian Klymochko: And it definitely appears that aesthetics has a long and above market growth future probably due to a number of themes happening, but let’s get into the company’s products, notice that you have the HydraFacial signature treatment. Can you talk about for a bit how it works and also its competitive positioning in the market? For example, why would customers choose your products instead of a competitors?


Clint Carnell: Yeah, so I’ll start with what the product does at its core. Our tagline is three steps, 30 minutes, the best skin of your life. And in every HydraFacial signature treatment, we do three things really well. The first step is we cleanse, the second step we extract and the third we hydrate. That happens to be the three best things you can do for your skin on a routine basis. It’s like diet and exercise and drinking water. So, we’re really, really good for your skin. What’s exceptional about the HydraFacial treatment though, is that it feels good. Most people fall asleep during the treatment. You look great immediately, you’re glowing. And then we pull up this gunky canister and we actually show you what we pulled out of your skin. And it has this kind of amazing and disgusting connection with the consumer and the aesthetician.


Julian Klymochko: Yeah, I bet.


Clint Carnell: Why do people put HydraFacial in their practice? I think, you know, Brent says this, I think better than I do. If you you look at the long menu of services that most Medi/spas. Botox has always called out by the category, everything else is, you know, it’s a laser, its tattoo removal, nobody’s calling it brand. I think HydraFacial’s the only other product now in a med spa, you’re seeing ask for by name. And if you think about, we own probably 80% of the market and we’ve created a category, we call beauty health. Because we believe healthy skin is beautiful skin and we don’t make customers choose. So, we’re really looking to promote clean, healthy skin as a way of acting, feeling and believe in your beautiful, and it’s been a really, really powerful driver of the company.


Julian Klymochko: Now with respect to how you guys generate revenue, I noticed that you offer both delivery system and consumables. So, you’ve been with the company for a while. Was that always the intent to have this sort of a razor, plus razorblade model. Where they constantly have to be refilling these consumables and continuously offer them?


Clint Carnell: Yeah, it’s a beautiful P&L to run, you know, our customer acquisition cost is relatively low and then we have really strong lifetime value. Something your investors will intuitively understand. So once a delivery system goes in and we put down about 3,500 to 4,000 new delivery systems globally a year, each one produces a predictable revenue stream to the company of five to $6,000 dollars per year. Why our customers like it is, you can get a HydraFacial literally every other week. And so, we have a really sticky consumer base that feeds our aestheticians and our medical spas. And so, everybody’s in this really healthy ecosystem. It’s kind of a flywheel of profits for everyone. And it’s very obtainable for the consumer, so, everybody wins. Consumer gets a $150 to $200 treatment, feels good, they look good. We show them what we pulled out of them, the esthetician or the med spa makes a predictable income stream. And we have very nice margins on both our delivery systems and our consumables. So, it’s a really healthy ecosystem we participate in and everybody kind of wins and that’s unusual in business for everybody to win in the value chain, but this truly is a win, win, win.

Michael Kesslering: And so, providing a win-win win situation, obviously it flows through, into your P&L. Can you just go into a little bit greater detail on, how you achieve in a granular basis, how you achieve those high net promoter scores and how you go about, because another aspect that’s really interesting is, is the educational aspect with aestheticians with education and outreach. So, a little bit more into that?


Clint Carnell: Yeah, you know, I’ve been in the C-suite now, for I guess, 15 coming up on 20 years, which is frightening to say, and you make mistakes, you have some success along the way.

I thought when we did diligence, we had such a beautiful product at its core. Let’s build a company around that and create a category and let’s do it the way we’d want to be treated. And so, we did a couple of things I think we’re a little unique. One is, the company considers our customers truly our business partners. So, when we asked our business partners, what they needed from us, the esthetician was the common thread. She’s actually the provider in that case. And she asked for education, she asked for help and marketing, additional technology. And so, we’ve invested heavily so heavily that we actually created HydraFacial connect, our new online University. I think in the next couple of years, we’ll be the largest educator and deployer of estheticians in the world. And when we’ve done that, she’s incredibly loyal to us and actually works on our behalf.


For instance, 80% of our social media postings are from our customers, they do it for free. They’re amazing business partners. Secondly is, most companies are always worried about the competition and we thought, what about a competition is really awareness about good, healthy skin and making it simple for the consumer. So, we call ourselves an and company. And if you think about HydraFacial, we work with everybody else and make them better. We’re like, we’re like having a clean canvas for Botox, fillers, other laser treatments, a skincare. So, we’re an and company that’s been very, very powerful because it gives us a lot of friends in the community. And what we’ve done is we’ve taken the relationship with the consumer, the relationship with the aesthetician, invested in that community. We’ve named it HydraFacial nation. And it’s really the force multiplier that I think allows HydraFacial to punch well above its weight.


Julian Klymochko: So, let’s get into the big news. You guys recently announced, at least in a few months ago, your business combination going public transaction through the SPAC Vesper Healthcare acquisition at a $1.1 billion dollar enterprise value, obviously a massive step for HydraFacial and prior to getting into it, I just wanted to note like Vesper IPO, September 30th, this deal was announced December 9th. So just around two months between the IPO, the SPAC and then the definitive agreement on the business combination. So clearly the Vesper team was keen on the asset. They took no time to get a deal struck. Prior to getting into the details, how was it working with former Allergan CEO, Brent Saunders on this merger?


Clint Carnell: He’s amazing. The backstory, one is, I’ve got a lot of respect for Brent, kind of admired him for many years. You know, we’ve got some common thread with Bausch Lomb and then obviously we’re in the same space when he was running Allergan. When Brent was with Allergen, we actually talked about them acquiring HydraFacial. So, we got to know each other through that process and for variety of reasons at the time, it didn’t work. Mainly that we had only had the asset for about a year and a half. My private equity firm was not ready to sell. They thought they had a lot of value left to create, the deal didn’t go through, but Brent was able to do some light diligence. We got to know each other, we stayed friends. And when his SPAC came to the market, it was opportunistic for us.


We were looking to go traditional IPO and I had the company really slotted to do that. But I felt with Brent, we got not just capital. But we got strategic capital with a guy with a lot of public market experience. So, I think if you look at our two career paths. Brent done an amazing job with some of the largest brands in the world. I’ve been a builder of brands in this category. And I think if we marry those two expertise and we do it the right way, you know, I think we can build a hell of a company. So, I think we both are common vision. We both start through the eyes of the consumer first. We build products and services that are carefully curated to be best in class. And I think that’s why when you look at our NPS score, that’s probably the thing that I think Brent, if you were on the line would tell you he was most attracted to, you know, our version of a Yelp, real self-worth, 99.7% worth it rating from consumers, our estheticians give us an 80 on NPS and we punch even above Botox, which previously had been the most successful MPS product in the category. So, I get a great guy with a lot of experience, a common vision, and I think we’re just getting started, really early innings.


Julian Klymochko: It seems like it was a great fit between HydraFacial and Vesper and the team there. Lots of synergies, previous relationship, as you noted, we interested to hear, like in terms of your process, were you speaking to other SPACs, was it a pretty competitive process or did you guys really already know kind of your pick of the litter?


Clint Carnell: Yeah, very, very competitive. And you may be aware Julian that, last year about this time last year, we were actually in a very competitive private equity process and we had three of the most significant private equity players in the globe, down to the 11th hour when the world stopped spinning. And so, the company went through a really difficult time. I’ll spare you the details, but it’s been a tremendous turnaround story. What was really interesting is I think Brent was one of the first people to recognize that our business wasn’t just going to survive, but thrive coming out of the pandemic. So, you know, we were in discussions to go public the traditional way. We had all the advisors lined up. We had our banks hired a new CFO, Liyuan Woo. He’s amazing with public company experience, I’d upgraded the leadership team. And when Brent came with the SPAC, you know, there were other people, quite a few other people at the table, but I think he had the most compelling vision. Understood us the best, and you know, we were still in the middle of the pandemic with it getting worse, but I think what I was really encouraged about as he saw through past the pandemic and gave me a lot of comfort is that we can build a great business, you know, through it and on the other side.


Julian Klymochko: Right, obviously the pandemic was a pretty difficult time for the company and the team. But I wanted to get into that a little bit. I would like some details because I find it really interesting in, you know, what was the general effect of the pandemic on the company? Obviously, your revenue was affected specifically last April, but you know, what exactly happened and how did your team work through it?


Clint Carnell: Yeah, it was devastating. You know, I never want to live through 2020 again, I’m proud to say, you know, with a little bit of hindsight now, we built a better company and I’ll share some of the things that we were able to do while the business was shut down. Last March, you know, coming in well over $20 million in revenue and had been up into the right. It hit every quarter since ownership and believe it or not in April, we did negative 1 million in sales. I didn’t know you can do negative sales, but we had returns come back. May was pretty anemic, June was pretty anemic. By September, we were basically back to 19 levels, which is just incredible when you think about it. We sold over 2000 delivery systems during the pandemic and really, really pleased.


We published our Q4. And I think, you know, people have been pretty surprised about how well the company has done. What did it do to the company? We literally went from a company that had been up until the right its entire ownership period to having a furlough about 85% of all employees. Fight for survival because we were in the middle of a process with, you know, skinny balance sheet. And my investors stuck by us, but some more cash in the balance sheet. We trimmed everything we could. And then we did a couple of things to help the fight on COVID. We took up a scheduling for telemedicine with one of our sister companies that got hit by COVID real hard. So, we were on the front lines of taking, you know, consumer calls about thinking they were going to die back in March and April. We helped a local company here with R&D because they got a grant from the Government to take their pediatric ventilator and modify that, which was really rewarding. They just got an emergency use approval here a couple of weeks ago. And then we popped up a mask business and we actually outfitted the aesthetics business with a really cool copper mask that was really just a step under N95. So we did that to put some cash on the balance sheet and that our business started coming back. What we did is we kept engaged with our estheticians. They were scared, so I kept a lot of sales and marketing leadership in place, you typically wouldn’t. Because I believe if we came back fast, I didn’t want to have to rehire leadership because my leaders globally would know who to hire back. And so, I’m really pleased. I sit here today, we’ve hired back every furloughed employee and we decentralized, we kind of went towards a wartime leadership. Where I decentralized decision-making, but we had a really strong platform right here in California on the message that we took out there to our marketplace. And, you know, it worked out far better than I ever would’ve imagined. And really, really proud, proud of the leadership team and all of the employees that muscled through COVID-19.


Julian Klymochko: And was it difficult being owned by a private equity firm to go through that specific, you know, difficult experience just given, you know, typical private equity firms do utilize, you know, more debt, more leverage on the balance sheet. Was that a consideration of some of the steps that you had to take?


Clint Carnell: Yeah, and we had over, we still do. Over $200 million dollars in debt. You know, we had done a full dividend recap about 18 months into our ownership. Companies never even come close to covenants. All of a sudden you have no revenue in $200 million dollars in debt. So, you can imagine, you know, scary times, but they were really thoughtful. Our lenders were incredible too. They gave us the necessary to get our feet under us. And so, you know, I’m pleased to say, everybody’s going to come out on the other side of this. Our investors are going to do quite well. They’re rolling a very significant portion of their investment and we’ll stay on the board. Our lenders have been fantastic and said, they’d like to line up again if we ever need a debt, but we’re going to have a debt free balance sheet. And we’re putting a hundred million dollars of cash on the balance sheet. And so, everybody’s stuck together and, you know, we were having several hours of calls a day. We were all scared as hell, but we went through the fog of whatever that was. And I think we emerged as a far stronger company.

Julian Klymochko: Yeah, certainly. And you mentioned the much-improved balance sheet once this transaction closes, it includes a $350 million dollar pipe financing, cash from the Vesper SPAC as well. Now you mentioned potentially considering a traditional IPO, you ultimately went the SPAC route. What key advantages did the SPAC provide such that you went that route as opposed to the traditional IPO?


Clint Carnell: Yeah, for us the SPAC route probably as a vehicle didn’t make a darn bit of difference, I think as Brent and the fact that we’ve combined together on this, because we had to do out of three years of financials to become peek-a-boo compliant. So, we might have arguably gone IPO with two years of financials, audited, and been here faster. So, if anything, maybe it slowed us down a little bit, but I think it’s what I talked about earlier, having strategic capital, having somebody as well-recognized by the capital markets out there as a deal maker. And certainly, you know, a guy that had run one of the most successful brands, Botox, probably that that HydraFacial has a lot of similar characteristics too. So, I think, you know, when I look at, it bugs me when I turn on CNBC or, you know, open up the Wall Street Journal and see all the criticality around SPACs right now, because this is a real asset. This has, you know, 50% kegger, you know, really nice top line, almost the same. And we have a really specific executable master plan that we’re executing quite well. So, I think this will be a great public company. I’m really bullish, and the SPAC is probably just, you know, a non-factor in our particular case.


Michael Kesslering: Yeah, where it’s really not as much SPAC story as like you mentioned. I mean, positive EBITDA a secular trend as well. When your kind of moving forward from the difficult times of last year, and now you’re looking at kind of the outlook for where to put that capital to use. What sort of growth opportunities are you seeing?


Clint Carnell: Yeah, that’s a great question, Michael. And we’ve got what we call our master plan. We have it out there for all the world to see. We’ve been executed upon it. The first step is we’re going to continue to sell a lot of product and those products are very profitable. So, this is a growth story. It’s a land grab, so we want to keep getting delivery systems out there closer to people around the globe. You know, a lot of people have skin on this earth and we want to be closer to them and we’re just early some of these markets. Second thing is we’re going to continue to invest in our providers. They’ve been amazingly loyal. It’s amazing just using good business partnership principles, how well they’ll respond. We shoot straight with them. I hate the word authentic and transparent. We just shoot straight. When there’s an issue, we work with them on developing our products and services. We keep them involved in our business. So, we’ll continue to do that, including the HydraFacial connect, which we’re just graduating some of our first masterclass.


Now we’re moving to vertically integrate closer to the consumer. We’ve had success with things like world tour and pop-up shops, but we’re going to double our marketing expense. And a lot of that’s going to be that we’re going from a B2B to a B2B2P company. So, we’ve got e-commerce, we’ve got a home product coming. We’ve got a pop-up shop in London right now that had to shut down. We’ve got 2000 consumers on the waiting list. 85% of them never had a HydraFacial. And the only reason they can’t get one is because London’s not open yet. So, we’ll do more things like that. And then lastly, we’ve got a family of products coming out in early 2022, which are going to connect that community we’re talking about. So, our professional device, our handheld device, the app that we currently have in alpha, it’s going to connect our entire universe so that we can treat consumers wherever, whenever. And if we do it right forever, we’ll be sharing a lot of data back and forth, just making their skincare journey that much easier. And we call that beauty health. I think if we do that, we can really help consumers navigate a better journey. If you think about how HydraFacial work, the most efficacious thing and beauty, you know, it’s tends to not have a lot of clinical evidence, but the most approachable thing over in medical aesthetics, where a lot of times they’re expensive, they hurt, they scare people. So, I think this idea of beauty health is a really powerful concept. We take the creation of the category that we’ve helped define really seriously. And I think if we continue to do what we’ve been doing, it should be a formidable company for many years to come.


Julian Klymochko: You mentioned effectively creating this category, beauty health, your significant market shares, global growth opportunities. And really just the fact that everyone has skin and wants it to look great. But for investors kind of new to this story, considering potentially investing in a HydraFacial stock, can you provide just a quick elevator pitch, why they should consider this stock instead of any other healthcare sector focused company?


Clint Carnell: Yeah, so personal care services were already a huge macro trend. When you look at millennials, you look at Generation Z, you look at more men, more people of color. Personal care service was big before the pandemic. And if anything, staring at ourselves on Zoom and being locked up in our apartments and houses. Personal care service looks to be coming out with stronger interest from the consumer. So, one you got a very strong macro trend. The earliest entry point is HydraFacial. So, when you’re transitioning from like makeup and hair dye and things like that, and you’re going towards more significant medical aesthetics, we’re really right there to be that bridge. And the first thing a consumer’s likely to be in, and we can treat younger because we’re more affordable. We don’t hurt and we’re not abrasive, so we can treat older and we aren’t biased against your skin color. You can treat black people, white people, and everybody in between, and because it doesn’t hurt, more men are in. So, you got a big macro trend. You’ve got favorable demographics where we sit right at the epicenter. And then this company just has a fantastic financial profile. I mean, the 50% top line kegger felt the same on the bottom line, over the last four and a half years, you know, we’re coming out of this pandemic and I see the exact same type of profile for this company on a go-forward basis. We’ve been producing 25% EBITDA consistently for our private equity partners. We’re changing the investment profile a little bit, you know, we’ve committed to 14% EBITDA as a percentage of revenue. But that’s still will be a really fast-growing company, huge market opportunity and profitable. So, I think you get all the benefits of a high growth company, but with a really nice piano.


Julian Klymochko: Thanks for sharing everything today. Clint, before letting you go. Where can investors find out more about the HydraFacial Company?


Clint Carnell: Yeah, so we currently trade under Vesper ticker, VSPR, but you can go to We’d love to have you join the HydraFacial nation. And best thing I can tell your investors is go get a HydraFacial and if you get it, you tend to get it. And I think you’ll find that you’ve got a great treatment. It provides an amazing experience and it’s fun if we can all make some money doing that as well. So, we’re deeply committed to creating a lot of shareholder value, building a great company. And like I said, there’s a lot of people out there with skin on this planet. We just want to get closer to make more of the HydraFacial Company.


Julian Klymochko: Yeah, well, there you go. A nice pitch for the product and if you like it, then perhaps check out the stock. So, thanks so much Clint for joining us today, really exciting to have you on the show, and we wish you the best of luck as you guys complete this going public transaction through Vesper trading as VSPR. If you guys want to check it out. So, thank you very much, all the best.


Clint Carnell: Gentlemen, thank you, cheers.


Julian Klymochko: Alright cheers, bye.


Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.



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