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E.l.f. Beauty is buying Hailey Bieber’s Rhode, moving the beauty brand further into skincare.
The $1 billion deal, E.l.f.’s biggest acquisition to date, will see Bieber continuing in her role as Rhode’s chief creative officer and head of innovation. Launched in 2022, Bieber founded the company alongside Michael D. Ratner and Lauren Ratner and is credited with popularizing it through her name and social media following. She will oversee Rhode’s creative, product innovation, and marketing as well as act as a strategic advisor.
The $1 billion deal consists of $800 million in cash and stocks, with a potential $200 million payout depending on Rhode’s performance over the next three years. It is expected to close later this year.
In April, Rhode hired bankers at JP Morgan and Moelis to explore a sale, Reuters previously reported.
“From day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day,” said Bieber in a press release. “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.”
According to E.l.f., Rhode doubled its consumer base and made $212 million in net sales year-over-year as of March 31.
Rhode’s acquisition comes shortly after inking a deal to sell its products in Sephora stores in North America and the UK, starting this fall. Until now, Rhode sold products only through a direct-to-consumer model on its website.
Reaching high-end shoppers
The acquisition of Rhode moves E.l.f. further into luxury makeup and skincare. E.l.f.’s products target drugstore shoppers, and its marketing often shows they perform as well as luxury products. In contrast, Rhode’s products target a more high-end audience.
Both brands have seen success on social media. Bieber prominently promotes Rhode products in her “Get Ready With Me” videos, while E.l.f. creates viral content like its Vanity Table Talks series.
“E.l.f. Beauty found a like-minded disruptor in Rhode,” said Tarang Amin, E.l.f. chairman and CEO, 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.”
