Shares of Elizabeth Arden Inc. (NASDAQ: RDEN) skyrocketed early Friday following the announcement that the company will be acquired by Revlon Inc. (NYSE: REV). The companies have signed a definitive agreement under which Revlon will acquire all the outstanding shares of Elizabeth Arden for $14.00 per share in cash, representing an enterprise value for Elizabeth Arden of roughly $870 million.

The transaction was unanimously approved by both boards of directors. It is still subject to Elizabeth Arden shareholder approval, as well as regulatory approval. This deal is expected to close by the end of 2016.

Cost synergies of about $140 million are expected to be achieved through the elimination of duplicative activities, leveraging purchasing scale, and optimizing the manufacturing and distribution networks of the combined company. The companies anticipate that they will achieve additional growth opportunities in both sales channels and geographies.

Elizabeth Arden has a 50-day moving average of $9.36 and a 200-day moving average of $9.43. Compared to the purchase price, these represent premiums of 49.6% and 48.5%, respectively.

For the year ending in December 2016, the company expects to have an annualized net sales of roughly $3 billion. Revlon expects to generate net sales in the range of $2.0 billion to $2.1 billion in this time as well. The consensus estimates call for a combined net sales of $2.88 billion for both companies, with Revlon’s consensus estimate making up $1.91 billion of the total.

Fabian Garcia, president and CEO of Revlon, commented:

This acquisition is strategically and financially compelling. Elizabeth Arden and Revlon are both known for their iconic brands, entrepreneurial spirit and commitment to innovation, quality and excellence. Revlon plans to build upon Elizabeth Arden’s ongoing transformation by further enhancing the brand, with even more vibrant and relevant product development and marketing, while carefully preserving its unique heritage within prestige. Combining our brands, talent, and global distribution will give our company a significant presence in all major channels and categories, while accelerating sales growth in existing and new geographic regions. We look forward to bringing together our two top-notch teams to form a global leader in beauty.

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Shares of Elizabeth Arden closed Thursday at $9.31, with a consensus analyst price target of $11.25 and a 52-week trading range of $5.02 to $15.59. Following the announcement of the acquisition, the stock was up nearly 50% at $13.78 in early trading indications Friday.

Revlon shares closed Thursday at $31.15. The consensus price target is $42.00, and the 52-week range is $24.20 to $38.00.

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