American model, Hailey Bieber $1bn deal – here’s all you need to know

E.l.f. Beauty has reached an agreement to acquire Bieber’s beauty brand Rhode in a deal valuing it at $1 billion, the companies jointly revealed Wednesday.

The news comes just a month after WWD reported that Rhode had hired JP Morgan and Moelis to explore deal options. 

“They support founders, they want to help push the founders’ vision and get behind them,” Bieber said of the deal with E.l.f. in an interview with WWD. “That’s where we are with Rhode, and I’m ready to get to the next place.”  

That will include international expansion — or, as Bieber put it, “more places, more faces.” 

It’s not E.l.f.’s first rodeo with founder-led brands: The company acquired Naturium in 2023 and incubated in-house Alicia Keys’ Keys Soulcare, a fact that was attractive to Bieber.

“This is my baby, and to find a home for it is really not an easy process — it’s very scary,” Bieber said. “When I met the E.l.f. team, we had a lot of similarities when it came to the importance of community and team building.”

The deal marks E.l.f.’s biggest to date, and consists of $800 million in cash and stock payable at closing, and an additional potential earnout consideration of $200 million based on the future growth of the brand over a three-year timeframe. To fund the deal, E.l.f. secured $600 million in debt financing.  

It also comes at a time when E.l.f., which was one of the top-performing companies on the New York Stock Exchange in the first half of last year and surpassed the significant $1 billion milestone in net sales, has faced headwinds recently. These are namely in the form of tariffs, with 75 percent of its products manufactured in China. As a result, the company’s share price is down by around 25 percent in the year to date.

In an interview, E.l.f. chairman and chief executive officer Tarang Amin revealed that he had been in discussions with Rhode since October.

“E.l.f. Beauty is on fire, and it was a desire to fuel that fire with the acquisition of Rhode,” he said. “In less than three years, going from zero to $212 million of net sales, direct-to-consumer only, with just 10 products — I would never believe that if somebody told me,” he said. “The momentum and everything that Hailey has fits our ethos as a company, of wanting to invite her into our family and her entire team and be able to transform the beauty industry.”

Building on Bieber’s popular glazed doughnut skin content on Instagram, Rhode launched in 2022 with a tightly edited stock keeping unit count on its website. By the end of 2024, it was the top skin care brand by earned media value, having grown 367 percent from the year prior.

Since its launch, Rhode has expanded beyond the initial lip balms, serum and moisturizer to entail color cosmetics, phone cases and a recently confirmed partnership with Sephora in North America, which will kick off later in 2025. The brand’s net sales reached $212 million in the 12 months ended March 31.

The acquisition gives E.l.f. more than just a fast-growing buzzy brand: It will also mark E.l.f.’s entrée into Sephora U.S. “Going to every single U.S. and Canadian store this fall, followed by the U.K. by the end of the year, shows the confidence [Sephora] has,” Amin said of the launch. “They are great purveyors, and every beauty brand wants to go to Sephora.” 

When Rhode initially hired bankers, sources were skeptical the $1 billion valuation could be met, citing broader factors in the M&A landscape as well as the brand’s hefty marketing spend. Indeed, a raft of other brands — including Selena Gomez’s Rare Beauty, Makeup by Mario, Kosas, Merit, Jane Iredale and more — have gone to market and have yet to find buyers.

But Rhode bucked the trend, with one source noting it’s the fastest majority deal of $1 billion or more in beauty.

As part of the deal, Bieber will serve as Rhode’s chief creative officer and head of innovation, overseeing creative, product innovation and marketing. She will also act as a strategic adviser to the combined companies.

“I want to continue to push innovation — innovative products, innovative marketing, and I know they’ll be able to continue helping us,” Bieber said.

Cofounders Michael D. Ratner and Lauren Ratner and CEO Nick Vlahos will continue to lead the brand out of its Los Angeles office.

Amin also noted that every brand in the E.l.f. Beauty stable saw growth last year, with Naturium and Keys Soulcare sales reaching all-time highs. 

As for whether E.l.f. plans any more M&A, Amin stressed that his primary focus is the organic growth of its existing brand portfolio. 

“A billion-dollar deal is the biggest we’ve ever done in our history, which talks about our excitement and our confidence,but also gives a big responsibility to make sure we’re living up to everything Hailey wants and so I’d say that’s going to be the focus for us right now. How much can we grow our brand portfolio? How much can we just continue to disrupt the beauty industry?” he said.

In August 2023, E.l.f. acquired masstige skin care brand Naturium from The Center for $333 million as a broader strategy to give the company cachet in skin. 

With that acquisition, it doubled its penetration within skin care to 20 percent and wasted no time in expanding Naturium’s footprint into Ulta Beauty in the U.S. and Shopper’s Drug Mart in Canada.

In an interview with WWD last summer, Amin said: “One of the things we get with acquisition is greater scale right away. What we get with something like a Naturium is they went from zero to over $90 million in sales in three years. We liked the fact that it already had a good sales basis and a fully developed team that we could continue to build. We’ve been investing in the brand, we’ve been investing in the team, and we continue to see incredible results from it.” 

The acquisition news comes as E.l.f.’s net sales increased 4 percent to $332.6 million in its fourth quarter ended March 31. This beat Wall Street’s expectations of $327 million. Adjusted net income was $45.2 million. Adjusted diluted earnings per share were 78 cents, above estimates of 72 cents.

Due to the wide range of potential outcomes related to tariffs, the company is not providing a fiscal 2026 financial outlook at this time. 

Amin noted that around 75 percent of E.l.f.’s goods are manufactured in China, while Rhode is primarily manufactured in Italy and South Korea.

“Just like every company, tariffs are impacting us, but we have a mitigation strategy,” he said. “Last week, we announced to our community that we’re going to take all E.l.f. prices up $1 and what we told them is it’s a fraction of what the tariffs actually cost, but we really care about preserving great consumer value. We had 99 percent positive sentiment.”

As for when the company is likely to release a full-year forecast, he said: “As soon as we have resolution on where tariffs are going to head out, and we don’t want to put up guidance, and then have something change.”