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OAKLAND, Calif. - e.l.f. Beauty (NYSE: ELF), currently valued at $5.2 billion and maintaining impressive gross margins of 71%, has struck a definitive agreement to purchase rhode, a lifestyle beauty brand founded by Hailey Bieber. The deal, valued at $1 billion, includes $800 million payable at closing and a potential additional $200 million tied to the brand’s growth over the next three years. According to InvestingPro data, e.l.f. Beauty’s strong financial health and robust revenue growth of 46% make it well-positioned for this strategic acquisition.
The acquisition aligns with e.l.f. Beauty’s strategy to diversify its portfolio with brands that share its ethos of innovation and disruption. Rhode, known for its high-performance, skin-focused products, has rapidly grown its consumer base, doubling it over the past year and generating $212 million in net sales as of March 31, 2025. With e.l.f. Beauty’s current ratio of 1.9 and moderate debt levels, the company demonstrates strong financial flexibility for such strategic moves. For deeper insights into e.l.f. Beauty’s financial health and growth potential, investors can access comprehensive analysis through InvestingPro’s detailed research reports, available for over 1,400 US stocks.
Hailey Bieber, who will continue as Founder and also serve as Chief Creative Officer and Head of Innovation, has been a driving force behind rhode’s success. Under her creative direction, rhode has become a top disruptor in content, commerce, and community, earning the title of the No. 1 skincare brand in Earned Media Value in 2024.
The transaction, approved by e.l.f. Beauty’s Board of Directors, comprises $600 million in cash and $200 million in e.l.f. Beauty common stock, with additional earnout consideration based on post-closing performance. The purchase price represents approximately 3.8x rhode’s last twelve months’ net sales.
The cash portion will be financed through fully committed debt financing. Founders and key employees will receive shares subject to lock-up agreements, released over a one-year period. The deal is expected to close in the second quarter of Fiscal 2026, subject to regulatory approvals and customary closing conditions.
e.l.f. Beauty, established in 2004, has consistently pursued strategic growth, with its cosmetics brand leading in U.S. units sold and second in dollar share. The acquisition of Naturium in 2023 marked the company’s entry into the prestige beauty channel, a move further solidified by the upcoming rhode acquisition.
This announcement comes alongside e.l.f. Beauty’s report of its fourth-quarter and full-year Fiscal 2025 financial results, with management holding a webcast to discuss both the financial outcomes and the acquisition details.
The information in this article is based on a press release statement.
In other recent news, e.l.f. Beauty has announced a $1 price increase on its products, a move that analysts at Piper Sandler and Raymond James believe will help counteract the impact of tariffs and protect gross profits. Piper Sandler maintained an Overweight rating with a price target of $81, while Raymond James reaffirmed a Strong Buy rating with a $95 price target, citing the company’s resilience in demand and international expansion. DA Davidson, however, adjusted its price target to $64, maintaining a Neutral stance due to concerns over U.S. point-of-sale data and the company’s fiscal year 2026 guidance potentially not meeting market expectations.
In leadership changes, e.l.f. Beauty appointed Charles "Chip" Victor Bergh as a new board member following the resignation of Beth Pritchard. Bergh’s extensive experience includes roles at Levi Strauss & Co., Procter & Gamble, and board positions at HP, Inc., and Pinterest, Inc. Analysts at Raymond James expect strong fourth-quarter earnings, possibly exceeding forecasts, driven by successful product launches and international growth. Meanwhile, DA Davidson noted that e.l.f. Beauty’s recent product introductions have been incremental, though a significant launch is anticipated in April. The company’s board transition and strategic moves in pricing and expansion highlight its ongoing efforts to navigate the competitive beauty industry.
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