May 28 (UPI) — E.l.f. Beauty announced Wednesday it will acquire Hailey Bieber’s three-year-old beauty company Rhode for $1 billion.
“This powerhouse alliance between E.l.f. Beauty and Rhode is built on both brands’ shared focus on disruption and product innovation, setting the stage for transformative global expansion,” E.l.f. Beauty said in a news release about the acquisition of the company known for its high-performance, skin-focused products.
The 27-year-old model, who is married to pop singer Justin Bieber, in 2022 launched Rhode. The company has more than doubled its customer base over the past year and brought in $212 million in revenue in the 12 months ended March 31.
Last year, Rhode became the No. 1 skincare brand in earned media value with 367% year-over-year growth.
The acquisition comprises $600 million in cash and $200 million in stock, plus an additional potential $200 million payout based on Rhode’s performance over the next three years.
The cash consists of fully committed debt financing of $600 million.
They plan to close the deal by the close of the company’s second quarter of fiscal year 2026.
E.l.f’s brands include e.l.f. Cosmetics, E.l.f. Skin, Keys Soulcare, Naturium and Well People.
“We can’t wait to bring Rhode to more faces, places, and spaces,” Bieber said in a news release. “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.”
She plans to step into an expanded role of Chief Creative Officer and Head of Innovation for the new company.
“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,” she said.
E.l.f. Chairman and CEO Tarang Amin told CNBC: “I’ve been in the consumer space 34 years, and I’ve been blown away by seeing this brand over time.”
In a news release, Amin said: “E.l.f. Beauty found a like-minded disruptor in Rhode. 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.
E.l.f. shares declined about 4% in extended trading in the New York Stock Exchange. After the market closed at 4 p.m., the company also posted fourth-quarter financial data: $332.7 million revenue and 76 cents adjusted earnings per share over nine months.
About 75% of its products come from China, which has been slapped with a 30% duty on exports to the U.S. Last week, the company announced plans to raise prices by $1 on Aug. 1 to offset higher costs from tariffs.
Hailey Bieber is the daughter of actor Stephen Baldwin and her maternal grandfather is Brazilian musician Eumir Deodato.
She married Justin Bieber in November 2018 and they have one child, who is 9 months old. Justin Bieber is 31.
