Mergers &
Acquisitions

e.l.f. Beauty Inc. makes its largest acquisition to date with a premium-priced deal for Hailey Bieber's rapidly growing skincare brand Rhode, signaling aggressive expansion into prestige beauty.

e.l.f. Beauty Acquires Rhode for Up To $1 Billion

e.l.f. Beauty (NYSE: ELF) announced on May 28, 2025 its agreement to acquire celebrity skincare brand Rhode in a deal worth up to $1 billion, combining $600 million in cash, $200 million in stock, and $200 million in performance-based earnouts. The acquisition marks e.l.f.'s second major skincare purchase after Naturium in 2023 and is expected to close in Q2 FY2026 pending regulatory approval.

Strategic Expansion Into Prestige Skincare

The deal represents a strategic pivot for e.l.f. into higher-margin prestige skincare:

• Rhode generated $212M in net sales (FYE March 2025) since its 2022 launch
• Strong Gen Z appeal with viral social media presence
• Hailey Bieber to remain as CCO and innovation lead
• Complements e.l.f.'s 4% sales growth in last fiscal quarter

Deal Structure & Market Reaction

The transaction's mixed payment structure balances immediate outlay with performance incentives:

Upfront Cash	$600M
Stock Consideration	$200M in e.l.f. shares
Earnouts	Up to $200M over 3 years

Investors responded positively to the deal's strategic rationale, viewing it as both brand-additive and financially disciplined given Rhode's growth trajectory.

Acquirer: e.l.f. Beauty Inc. (Oakland, California)
Target: Rhode (Beverly Hills, California)
Deal Value: Up to $1,000,000,000
Announcement Date: May 28, 2025
Expected Close: Q2 FY2026
Acquirer Advisors: Latham & Watkins LLP (Legal)
Target Advisors: J.P. Morgan Securities & Moelis & Company (Financial); Cravath, Swaine & Moore LLP (Legal)

Key Takeaways

• Transformational deal expands e.l.f.'s reach into premium skincare
• Performance-based structure mitigates acquisition risk
• Retains Rhode's founder-led creative vision
• Creates cross-selling opportunities across demographic segments