E.l.f. Beauty recently signed a definitive agreement to acquire celebrity skincare brand Rhode, founded by Hailey Bieber, in a $1 billion megadeal.
The agreement includes $800 million of consideration payable at closing in a combination of cash and stock, subject to customary adjustments, and an additional potential earnout consideration of $200 million based on the future growth of the brand over a three-year timeframe.
“e.l.f. Beauty found a like-minded disruptor in rhode,” e.l.f. Chair and CEO Tarang Amin wrote in a statement. “rhode further diversifies our portfolio with a fast-growing brand that makes the best of prestige accessible. We are excited by rhode’s ability to break beauty barriers, fully aligning with e.l.f. Beauty’s vision to create a different kind of company. rhode is a beautiful brand that we believe is ready for rocketship growth.”
Bieber’s brand, centered around her skincare philosophy of “one of everything really good,” more than doubled its consumer base over the past year and drove a total of $212 million in net sales in the 12 months ending March 31, 2025.
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Though Rhode’s products are currently only offered on rhodeskin.com, e.l.f. announced plans to launch a physical in-store partnership with retailer Sephora throughout North America and the U.K. this year.
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Bieber will continue her role as founder and serve as Rhode’s chief creative officer and head of innovation, overseeing creative, product innovation and marketing.
She will also act as a strategic advisor to the combined companies.
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Rhode was the No. 1 skincare brand in earned media value (EMV) in 2024, representing 367% year-over-year EMV growth.
“We can’t wait to bring rhode to more faces, places, and spaces,” Bieber wrote in a statement. “From day one, my vision for rhode has been to make essential skin care and hybrid makeup you can use every day. Just three years into this journey, our partnership with e.l.f. Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally… I look forward to leading the brand into this exciting new chapter of possibilities alongside my Co-Founders Michael D. Ratner and Lauren Ratner, who have helped bring my vision to life from the start.”
Co-founders Michael D. Ratner and Lauren Ratner and CEO Nick Vlahos will continue to lead the brand out of the company’s office in Los Angeles.
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E.l.f. Beauty, a budget drugstore beauty brand founded in 2004, is the No. 1 brand in units across U.S. cosmetics and No. 2 in dollar share.
The company launched e.l.f. SKIN five years ago as its own brand to accelerate its potential in skincare and acquired Naturium in 2023, doubling the company’s skincare presence.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ELF | E.L.F. BEAUTY INC. | 90.45 | -1.33 | -1.45% |
Under the terms of the definitive agreement, e.l.f. Beauty agreed to acquire Rhode for $800 million at closing, comprised of $600 million of cash and $200 million, or about 2.6 million shares, of newly issued shares of e.l.f. Beauty common stock issued to existing equity holders of Rhode, subject to certain customary purchase price adjustments.
The transaction, which is expected to close in the second quarter of fiscal 2026, includes an additional potential earnout consideration of $200 million, based on the future growth of the brand over a three-year post-closing period. The purchase price at closing represents about 3.8x LTM net sales of $212 million on March 31.
Cash considerations consist of fully committed debt financing of $600 million. A portion of the shares issued in the transaction to the founders and certain key employees are subject to lockup agreements and will be released from the lockup over a one-year period.
