NEW YORK (TheStreet) -- Shares of Elizabeth Arden (RDEN) are soaring 48.76% to $13.85 on heavy trading volume on Friday afternoon after Revlon (REV) said it would buy the beauty products company in a deal worth $870 million.
Revlon will pay $14 per share in cash for the Miramar, FL-based company, a premium of about 50% of Elizabeth Arden's closing price of $9.31 on Thursday.
The New-York based makeup company said the acquisition will boost its skincare and fragrance business and expand its global footprint in markets such as the Asia-Pacific region.
The equity value of the deal is $419 million based on Elizabeth Arden's outstanding shares as of May 3.
TheStreet's Jim Cramer said this was a "brilliant move by Revlon," on CNBC's Squawk on the Street this morning.
"This is driven by the need to have makeup" when you leave the house every morning, Cramer added. Makeup can be more important to consumers because of the increased popularity of selfies and photos on social media.
Cramer has said previously that the resolution on the iPhone is so great that you can't walk out of the house without makeup because "you see everything."
He also mentioned that if investors like this deal, they should look at Estee Lauder (EL) stock.
About 31.39 million of Elizabeth Arden's shares were traded so far this afternoon, well above its average volume of 84,003 shares per day.
Shares of Revlon are spiking 8.44% to $33.78 on Friday afternoon.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on Elizabeth Arden stock.
The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
You can view the full analysis from the report here: RDEN