e.l.f. Beauty to acquire Hailey Bieber’s rhode for $1bn in strategic prestige skincare push

e.l.f. Beauty, Inc. (NYSE: ELF), a fast-rising leader in the mass-market cosmetics space, announced on May 28 that it has signed a definitive agreement to acquire Hailey Bieber‘s skincare brand rhode for $1 billion. The deal, which includes $800 million in upfront consideration and an additional $200 million in performance-based earnouts, represents one of the most significant celebrity-led beauty acquisitions in recent years. It signals e.l.f. Beauty’s boldest move yet into the premium skincare category—an area where the company has been steadily building its presence.

Why Did e.l.f. Beauty Choose rhode as Its Next Big Bet?

Founded in 2022 by model and entrepreneur Hailey Bieber, rhode has emerged as one of the fastest-growing brands in the modern beauty landscape. Its minimalist product lineup, focused on skin health and hydration, resonated strongly with Gen Z and millennial consumers. rhode reported $212 million in net sales for the 12 months ending March 31, 2025, a remarkable figure for a brand still in its early stages of expansion.

e.l.f. Beauty Chairman and CEO Tarang Amin described rhode as a “like-minded disruptor,” emphasizing its alignment with e.l.f.’s philosophy of democratizing beauty while pushing the boundaries of innovation and inclusivity. The acquisition will help e.l.f. tap into the prestige skincare channel—currently dominated by brands such as Drunk Elephant, Tatcha, and Summer Fridays—by offering a culturally relevant, influencer-powered label that’s already commanding both online and media attention.

What Are the Terms of the Acquisition Deal?

Under the terms of the agreement, e.l.f. will pay $800 million at closing—$600 million in cash and approximately $200 million in newly issued stock to rhode’s equity holders. The additional $200 million in earnout payments will be tied to the achievement of financial performance milestones over the next three years.

This places rhode’s valuation at approximately 3.8x its last-twelve-months revenue, a premium multiple reflecting its brand potential and market momentum. To finance the transaction, e.l.f. has secured fully committed debt financing. The equity portion will be subject to a lock-up period of one year for the founders and select employees.

The deal has already been approved by e.l.f. Beauty’s board and is expected to close in Q2 FY2026, pending regulatory approvals and customary conditions.

Historical Context: e.l.f.’s Growing Appetite for Skincare and Premiumization

The rhode acquisition comes two years after e.l.f. Beauty’s 2023 acquisition of Naturium, which effectively doubled its skincare business and signaled its growing interest in the category. Five years prior, the company had launched e.l.f. SKIN as a standalone brand, which marked the first major step toward building a diverse beauty portfolio beyond mass cosmetics.

e.l.f.’s strategy appears to follow the broader sectoral trend of premiumization and brand verticalization, a direction taken by several players seeking to maintain growth amid rising consumer demand for high-efficacy skincare and ingredient transparency. In doing so, e.l.f. is attempting to diversify across channels—online, DTC, and now prestige retail through rhode’s upcoming rollout in Sephora stores across North America and the U.K.

What Makes rhode Stand Out in the Competitive Skincare Market?

rhode is not just another celebrity brand. Its minimalist, barrier-supporting products and emphasis on hybrid skincare-makeup offerings have earned it strong traction among younger consumers. Beyond that, it led all skincare brands in Earned Media Value (EMV) in 2024, recording a staggering 367% year-over-year EMV growth—a critical indicator of organic brand engagement.

Hailey Bieber’s role as a beauty influencer and cultural tastemaker is seen as a key intangible asset in the deal. Her commitment to “essential skincare you can use every day” has translated into a loyal and growing customer base. As part of the acquisition, Bieber will take on the title of Chief Creative Officer and Head of Innovation, ensuring brand consistency while also advising the combined company on broader creative strategy.

The founding team—Michael D. Ratner, Lauren Ratner, and CEO Nick Vlahos—will continue to lead the brand from its Los Angeles headquarters, a setup designed to preserve rhode’s entrepreneurial culture and community-driven ethos.

How Is the Market Responding to e.l.f. Beauty’s $1 Billion Acquisition of rhode?

The announcement of e.l.f. Beauty’s acquisition of rhode on May 28, 2025, came alongside the release of its FY25 earnings results, and markets responded with a flurry of mixed sentiment. e.l.f. Beauty’s (NYSE: ELF) stock, which has historically traded at a premium compared to the broader cosmetics sector, experienced increased trading volumes post-announcement, although price movement was muted in the immediate aftermath.

As of May 30, ELF shares hovered in the range of $185–$190, reflecting investor caution around the $600 million debt financing that will fund the deal. While there was no immediate breakout in either direction, institutional desks noted moderate inflows into the stock on the back of positive sentiment around rhode’s revenue velocity and its synergy with e.l.f.’s strategic roadmap. The stock remains up more than 40% year-to-date, suggesting long-term investor confidence in the company’s fundamentals and acquisition strategy.

Buy-side analysts issued “hold” reiterations with revised 12-month targets in the $195–$210 range, factoring in the anticipated EBITDA drag from integration costs and the medium-term uplift from expanded Sephora retail placement. FII activity remained stable, while domestic institutions continued holding positions. Retail sentiment on platforms such as StockTwits and Reddit leaned positive, though caution was expressed around potential margin compression during integration.

Data-Rich Breakdown: Where the Numbers Stand

e.l.f. Beauty recently posted its FY25 results, highlighting continued top-line growth and category diversification. While the rhode acquisition is still pending, its expected contribution could significantly bolster e.l.f.’s skincare segment revenue, which was under 20% of total sales prior to Naturium’s inclusion. With rhode generating $212 million in revenue, it could bring e.l.f.’s skincare portfolio closer to the $500 million mark by FY26, depending on year-over-year growth and post-integration efficiency.

Analysts project synergy opportunities in product formulation, logistics, and cross-brand promotions. Importantly, rhode’s presence in DTC could offer operational learnings for e.l.f.’s other brands and increase average customer lifetime value through bundled offerings and hybrid loyalty programs.

What Lies Ahead for the Combined Entity?

The immediate focus will be on operational integration, expanding rhode’s reach through Sephora, and unlocking international distribution. In the medium term, e.l.f. is expected to position rhode as the flagship brand in its prestige skincare arm, competing head-to-head with incumbents like The Ordinary and Biossance.

e.l.f. may also leverage the brand’s innovation pipeline for cross-category expansions into lip care, sun protection, and hybrid makeup—a space where rhode’s current product philosophy already resonates.

From a governance standpoint, retaining the founding leadership was likely a condition for maintaining brand equity, and their roles could evolve into a model for future acquisitions if the integration proves successful.

Industry Implications: Is This the Blueprint for Next-Gen Beauty M&A?

The deal underscores a broader industry trend of “content-to-commerce” convergence, where brands with strong digital engagement and influencer equity become prime M&A targets. This is particularly relevant as beauty conglomerates compete for relevance in an age dominated by TikTok virality, minimalist routines, and consumer calls for ingredient transparency.

Much like Estée Lauder‘s acquisition of Deciem or L’Oréal’s recent AI-driven personalization strategies, e.l.f.’s bet on rhode reflects a clear pivot toward youth-led, community-centric, digitally native brands. The success of this acquisition could well inspire further beauty M&A centered on micro-celebrities and authentic brand storytelling.

With this $1 billion acquisition, e.l.f. Beauty is not just buying a brand—it’s buying cultural influence, digital momentum, and a bridge into the high-growth prestige skincare market. rhode’s combination of minimalist efficacy, digital-native engagement, and influencer leadership positions it as a rare asset in an increasingly saturated space. If e.l.f. executes the integration with precision, the deal could redefine its growth profile and place it among the most agile and future-forward players in the global beauty industry.