Lyrical Muse

In a major beauty industry shake-up, e.l.f. Beauty has announced a definitive agreement to acquire Hailey Bieber’s skincare brand, rhode, in a deal valued at $1 billion (USD), marking the cosmetics company’s largest acquisition to date. The transaction, expected to close in the second quarter of fiscal 2026, signals e.l.f.’s strategic leap deeper into the prestige skincare market and broader global distribution.

The $1 billion deal comprises $800 million in cash and stock upon closing, subject to customary adjustments, with an additional $200 million earnout contingent on rhode’s performance over the next three years. rhode, founded in 2022 by Bieber and known for its collection of high-performance, skin-focused products, has quickly solidifed itself as one of beauty’s fastest-growing brands, generating $212 million in net sales over the past 12 months and commanding top placement in earned media value across the skincare sector.

“rhode further diversifies our portfolio with a fast-growing brand that makes the best of prestige accessible,” said e.l.f. Chairman and CEO Tarang Amin. “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.”

A Strategic Alignment of Disruption and Innovation

With only ten products to date, rhode’s meteoric rise has stunned even seasoned industry veterans. Bieber’s minimalist, high-performance approach to skincare, anchored by her “one of everything really good” philosophy, has resonated with Gen Z and millennial consumers alike, drawing a fiercely loyal following and creating a direct-to-consumer juggernaut.

“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,” said Hailey Bieber, who will remain Founder and take on an expanded role as Chief Creative Officer and Head of Innovation. She will also serve as a Strategic Advisor to the merged companies. Her influence, paired with the brand’s innovative marketing strategy and team, fueled rhode to be the No. 1 skin care brand in Earned Media Value in 2024, representing 367% year over year EMV growth.

e.l.f.’s acquisition of rhode not only adds a high-performing skincare brand to its portfolio, alongside e.l.f. SKIN, Keys Soulcare, and Naturium, but also opens doors to prestige retail channels, including Sephora, where rhode is expected to launch later this year in North America and the U.K.

Founder-Led Vision Meets Beauty Conglomerate Power

rhode’s executive team, including Co-Founders Michael D. Ratner and Lauren Ratner, along with CEO Nick Vlahos, will continue leading the brand from its Los Angeles headquarters, preserving its entrepreneurial DNA. Their efforts have built a brand that thrives at the intersection of commerce, content, and community, an ideal fit for e.l.f.’s culture of disruption and inclusivity.

For Amin, the acquisition is as much about vision alignment as it is about business: “I’ve been in the consumer space 34 years, and I’ve been blown away watching rhode go from zero to $212 million in just three years, direct-to-consumer, with ten products. That level of disruption caught our attention.”

Transaction Details and Industry Impact

The transaction will be funded with $600 million in debt and $200 million, or approximately 2.6 million shares, in newly issued e.l.f. Beauty shares. Select shares issued to rhode founders and key team members will be subject to a one-year lock-up period. The transaction also 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 acquisition has already received board approval and is pending regulatory clearance. The transaction is expected to close in the second quarter of Fiscal 2026. The purchase price at closing represents approximately 3.8x LTM net sales of $212 million on March 31, 2025.

This deal highlights a new era in beauty M&A, where the merging of cultural capital, digital community-building, and product efficacy can command billion-dollar price tags. For e.l.f., it’s a calculated bet on a future where skin-first beauty, creator-driven brands, and authentic storytelling redefine industry leadership.

What do you think about e.l.f. Beauty’s $1B acquisition of Hailey Bieber’s rhode? Game-changing move or calculated risk? We’d love to hear your thoughts!

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