'Welcome relief': Hair-care company Olaplex jumps after Henkel agrees to acquire it

Shares of Olaplex, a small-cap premium hair care brand, surged more than 50% on Thursday. The company said it is set to be acquired at a premium by German conglomerate Henkel. The deal is a “welcome relief” for Olaplex investors, reckons Motley Fool contributor Josh Kohn-Lindquist. Since its IPO in 2021, the company’s shares have lost almost all their value, having fallen more than 90%, while its financial performance has largely stagnated.

Olaplex shares jumped 51% on the Nasdaq on Thursday to $2.00 per share, the highest level since late 2024. In early trading on Friday, the stock was little changed.

The rally was driven by the company’s announcement that it will be acquired by Henkel. The deal is valued at $1.4 billion, or $2.06 per share. This implies a premium of about 55% versus the closing price on Wednesday.

The sale was approved by Olaplex’s board. The majority shareholder of the small-cap company – private equity fund Advent International – has also approved the transaction, meaning no further shareholder approval is required, the announcement said. The deal still requires regulatory clearance. The parties expect to close the transaction in the second half of the year, after which Olaplex shares will no longer trade on the exchange.

The acquisition is a “welcome relief” for Olaplex investors after several difficult years, Motley Fool contributor Josh Kohn-Lindquist said. Olaplex offers a relatively niche product, and it may be better suited within Henkel’s broader brand portfolio than as a standalone company, he added.

The deal is a win-win for both Henkel and Advent International, Jefferies believes, as reported by Barron’s. It supports Henkel’s push to expand its hair-care portfolio and global distribution, “while providing a clean exit for Advent,” Jefferies said.

Olaplex shares are covered by 10 Wall Street analysts, all of which rate them “hold.” The average target price of $1.78 per share is below current levels.

Olaplex went public on the Nasdaq in 2021, with shares priced at $21 per share and the business valued at $15 billion.

At the time of its market debut, Olaplex was delivering triple-digit sales growth and roughly 30% profitability, Kohn-Lindquist wrote. In 2021, the company reported net sales growth of 112% to $598.4 million.

The situation then deteriorated rapidly. In the first quarter of 2022, net sales growth slowed to 58.0%, and in the second quarter to 38.6%. Ahead of its third-quarter results, the company cut its full-year 2022 outlook for this metric by half – to 18%. Olaplex cited macroeconomic pressure, rising competition, and slowing customer acquisition. The company said it would address these challenges, but the turnaround did not materialize.

Since its IPO, the company’s market capitalization has fallen nearly 92% to $1.3 billion – even after Thursday's rally. For 2025, Olaplex reported net sales growth of just 0.1% to $422.96 million, nearly 30% below its 2021 level.