On October 4, 2023, the Company, through its wholly owned subsidiary, e.l.f. Cosmetics, Inc., completed its acquisition of Naturium LLC (“Naturium”) (including the indirect acquisition of equity interests in Naturium through the purchase of TCB-N Prelude Blocker Corp., a holding company) (the “Acquisition”), which furthered the Company’s mission to make the best of beauty accessible to every eye, lip, face and skin concern. Naturium is a skin care company that provides clinically effective products at an affordable price. The Company directly and indirectly acquired all rights, title and interest in and to the outstanding equity securities of Naturium for a purchase price of $333.0 million in a combination of cash and Company stock.

The following table summarizes the fair market value of the consideration transferred and how the Company calculates the goodwill resulting from the acquisition (in thousands):


Cash consideration			$	275,266
Equity consideration (common stock issued)(1)			57,772
Total consideration transferred			333,038
Less: Net assets acquired
Net assets acquired, excluding liability assumed for acquisition-related seller expenses	$	174,625
Liability assumed for acquisition-related seller expenses(2)	(10,549)
Net assets acquired			(164,076)
Goodwill			$	168,962

(1) The fair market value of the $57.8 million common stock issued (equivalent to 577,659 shares of common stock) was determined on the basis of the opening market price of the Company’s stock of $100.01 per share on the acquisition date.

(2) In connection with the Acquisition, the Company paid Naturium’s acquisition-related expenses of $10.5 million recognized as an assumed liability at the acquisition date.

The Company incurred and expensed acquisition transaction costs of zero and $2.4 million during the three months ended September 30, 2024 and September 30, 2023, respectively, and $0.4 million and $2.4 million during the six months ended September 30, 2024 and September 30, 2023, respectively, which are included as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

The Acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair values on the acquisition date. The purchase price allocation, deferred tax calculations and residual goodwill were

finalized during the quarter ended September 30, 2024. Naturium’s results of operations have been included in the Company's condensed consolidated financial statements from the date of acquisition.

The following table presents the purchase price allocation recorded in the Company's condensed consolidated balance sheet on the acquisition date and upon finalization during the quarter ended September 30, 2024. The adjustment reflects finalization of purchase accounting for facts and circumstances that existed upon the acquisition date as follows (in thousands):


Cash	$	293
Accounts receivable	7,388
Inventory	16,236
Prepaid expenses and other current assets	1,899

Goodwill(1)	168,962
Intangible assets	162,100
Total assets acquired	356,878
Accounts payable	(15,897)
Accrued expenses and other current liabilities	(6,025)
Net deferred tax liability	(1,918)
Total liabilities assumed	(23,840)
Total purchase price	$	333,038

(1) The goodwill represents the excess value over both tangible and intangible assets acquired and liabilities assumed. The goodwill recognized in this transaction is primarily attributable to the Company’s expectation that Naturium can continue to expand distribution and deliver new skin care products. A substantial amount of the goodwill is expected to be deductible for tax purposes.

The estimated fair values (all considered level 3 measurements) of the identifiable intangible assets acquired as of the acquisition date, their estimated useful lives and fair value methodology are as follows:


	Fair Value		Estimated Useful Life
	(in thousands)		(in years)	Fair Value Methodology
Customer relationships – retailers	$	20,000	10	Excess earnings method
Customer relationships – e-commerce	17,600		3	Excess earnings method and with and without method
Trademarks	124,500		15	Relief from Royalty method
Total identified intangible assets	$	162,100