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Hailey Bieber’s bank balance is about to get a lot larger.
e.l.f. Beauty (ELF-0.72%) announced an agreement to buy Hailey Bieber’s skincare line, rhode, for $1 billion. Company officials lauded the move, and shareholders sent the stock up 15% in morning trading.
The sale includes $800 million worth of cash and stock and a $200 million potential earnout consideration depending on growth of the brand over the next three years.
“e.l.f. Beauty found a like-minded disruptor in rhode,” said e.l.f. Chairman and CEO Tarang Amin 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.”
Bieber’s brand – from her middle name – also carries celebrity clout. In addition to her own accomplishments in modeling and acting, she is the daughter of Stephen Baldwin, the youngest of the famous Baldwin brothers, and wife of pop singer, Justin Bieber.
“I always had big dreams for the company, and the most important thing to me is to keep bringing rhode to more spaces, places, and faces globally,” Bieber celebrated in a May 28 Instagram post.
rhode’s focuses on a few product lines (blushes, lip balms) and also has an altruistic element. The company pledges a minimum of 1% of sales and ongoing team efforts to support organizations “actively dismantling the barriers that impede women* in their careers and limit their access to healthcare, while helping them in pursuing their long-term goals.”
Megan Vasquez, beauty expert at GRIN, an influencer marketing platform. tells Quartz that the deal is a win for both companies.
“Both brands can double down on what they do best: fast, consumer-first innovation and social-first marketing,” Vasquez said. She noted that in the deal e.l.f. gets a premium, Gen Z–loved skincare brand with a built-in content engine and loyal online fanbase, while rhode gains access to e.l.f. ‘s supply chain, retail expansion, and global scaling power.
“We can expect to see rhode scaling product categories and retail presence fast— especially in global markets and prestige retail. e.l.f. will continue to pursue culturally relevant acquisitions that unlock new audiences while maintaining its viral, digitally native ethos.” Vasquez said. She credited Bieber for carving out a unique niche in the space.
“Hailey Bieber built a brand narrative that was aspirational and achievable. By leaning into viral skincare trends like ‘glazed donut skin’ she invested in trends that were both memorable and product-forward,” she said, adding that the prioritization of DTC and social-first distribution allowed rhode to stay close to the consumer and iterate quickly.
“The brand understood that minimal SKUs and maximum cultural resonance are the ultimate combination for the modern beauty playbook.”
The announcement followed e.l.f.’s fourth quarter earnings released on Wednesday.
Total revenue was up 4% on a year-over-year basis. The company ended the quarter with $148.7 million in cash and cash equivalents and $256.7 million in total debt outstanding.