Stock Market Today, March 26: Olaplex Shares Surge After Henkel Agrees to $1.4 Billion Buyout

Olaplex (NASDAQ:OLPX), a hair care treatment and protection specialist, closed Thursday at $2.01, up 51.13% for the session. The stock surged after news that German consumer goods behemoth Henkel agreed to acquire Olaplex for $2.06 per share in cash. Trading volume reached 104.6 million shares, about 2,904% above its three-month average of 3.5 million shares. Olaplex IPO'd in 2021 and has fallen 92% since going public.

How the markets moved today

S&P 500 fell 1.76% to finish Thursday at 6,476, while the Nasdaq Composite declined 2.38% to close at 21,408. Within personal care products, industry peers Estée Lauder Companies closed at $69.72, down 4.64%, and Procter & Gamble finished at $142.33, slipping 1.10% as investors reassessed sector growth prospects.

What this means for investors

Olaplex’s disappointing run as a publicly-traded company is coming to an end after the company agreed to be acquired for $2.06 per share in an all-cash deal with German consumer goods giant Henkel. The deal is worth $1.4 billion, far from Olaplex’s $15 billion market cap at its initial public offering in 2021.

When Olaplex first debuted on the market with its premium hair care products, it was growing sales by triple digits and boasted a 30% net profit margin. Since then, sales growth and profitability have turned negative, likely making the buyout a welcome relief. A relatively niche offering, Olaplex may be better suited in a broader portfolio of brands within Henkel rather than as a standalone company, so the deal makes sense to me.

Josh Kohn-Lindquist has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.