ELF Beauty Closes in on Secondary Offering

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e.l.f. Beauty Inc. (NYSE: ELF) has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its secondary offering. The company priced its 8.34 million shares at $27 per share, with an overallotment option for an additional 1.251 million shares. At this price, the entire offering is valued up to $258.96 million.

The underwriters for the offering are JPMorgan, Morgan Stanley, Piper Jaffray, Wells Fargo, William Blair, BMO Capital Markets, Cowen, Stifel and SunTrust Robinson Humphrey.

This is one of the fastest growing, most innovative cosmetics companies in the United States. ELF Beauty has challenged the traditional belief that quality cosmetics are only available at high prices in select channels. The company offers high-quality, prestige-inspired beauty products for eyes, lips and face at extraordinary value, with the majority of its items retailing for $6 or less.

These price points encourage trial and experimentation, while the commitment to quality and a differentiated consumer engagement model engenders loyalty among a passionate and vocal group of consumers.

ELF Beauty believes its success is rooted in the innovation process and ability to build direct consumer relationships. Born as an e-commerce company over a decade ago, it has created a modern consumer engagement and responsive innovation model that keeps products on-trend and consumers engaged as brand ambassadors.

The consumers provide real-time feedback through reviews and social media, which enables ELF Beauty to refine and augment its product portfolio in response to their needs. The company leverages its fast-cycle product development and asset-light supply chain to launch high-quality products in as few as 20 weeks from concept, and 27 weeks on average.

The products are first launched on elfcosmetics.com, and distribution is generally only broadened to its retail customers after ELF Beauty receives strong consumer validation online. The company believes this has led to consistently strong retail sales per linear foot of shelf space. This is also one of the fastest growing cosmetics brands at Target, Walmart and CVS.

The net proceeds from this offering are going toward the selling stockholders.

Shares of ELF traded up 3.1% at $28.47 Friday morning, with a consensus analyst price target of $31.00 and a 52-week trading range of $23.73 to $32.54.