rhode e.l.f. Acquisition: Deal Terms, Earnout and Results From SEC Filings

e.l.f. Beauty bought Hailey Bieber's rhode in August 2025 in a deal headlined at $1 billion. Its SEC filings show the cash and stock split, how the earnout works, and how the brand has performed since closing.

Because the buyer is a public company, the terms of the rhode elf acquisition sit in SEC filings rather than in anonymous leaks. e.l.f. Beauty agreed on May 28, 2025, to buy rhode, the skincare brand Hailey Bieber launched in 2022, and completed the deal on August 5, 2025.

That paper trail makes the deal a useful case study for founders weighing a sale: it shows the headline price, how the price was paid, what the founder agreed to keep doing, and how the buyer accounts for a brand once it owns it.

The price: what “$1 billion” actually meant

The headline number was a ceiling, not a check. e.l.f.’s announcement said it would acquire rhode “for $800 million at closing,” made up of $600 million in cash and $200 million in newly issued e.l.f. shares, about 2.6 million of them. A further $200 million could follow as an earnout tied to growth over the three years after closing.

Deal piece As announced, May 2025 As booked, 10-K
Cash $600 million $590.1 million
e.l.f. stock $200 million $300.3 million
Earnout Up to $200 million $7.1 million initial value
Total Up to $1 billion $897.5 million

Why the columns differ: the merger agreement fixed the share count using a per-share value of $77.1685, based on trading before the deal was signed, according to the closing 8-K. The annual report then recorded the 2,582,371 shares at their fair market value on the acquisition date, $300.3 million. The earnout went on the books at its estimated fair value, not its maximum.

The price at closing was “approximately 3.8x” rhode’s trailing 12-month net sales of $212 million to March 31, 2025, e.l.f. said. A sales multiple compares a purchase price with a year of revenue; it is a common shorthand in consumer deals where profits are small or undisclosed.

How the earnout works

An earnout is part of a purchase price that the seller receives only if the business later hits agreed targets. e.l.f.’s 8-K split rhode’s earnout into two tiers: up to $100 million for achieving annual revenue projections over the three years after closing, and up to another $100 million for beating those projections “by a specified amount.”

The filings show the earnout moving in the sellers’ favor. e.l.f. said the contingent liability was remeasured to $64.7 million as of March 31, 2026, and to $80.8 million as of June 30, 2026, citing “the outperformance of rhode’s revenue results” and a revised upward forecast. That is an accounting estimate of what may be paid, not a payment already made.

How the cash and stock were funded

e.l.f. lined up debt for the cash portion. The May 2025 release said the cash portion was backed by “fully committed debt financing of $600 million,” and the 10-K says e.l.f. used an incremental term loan, revolver borrowings and cash on hand. Paying partly in stock let the sellers share in e.l.f.’s future, but the release added a restriction: some shares issued to founders and key employees were subject to lock-ups released over a one-year period.

What the founder signed up for

Bieber did not walk away. e.l.f. said she would keep the Founder title and add two jobs, Chief Creative Officer and Head of Innovation, putting her in charge of the brand’s creative work, new products and marketing. She was also to act as a strategic advisor to the combined company. Her co-founders Michael D. Ratner and Lauren Ratner and CEO Nick Vlahos were to keep running the brand from its Los Angeles office.

The buyer is open about why. Its 10-K warns that “rhode’s performance will be substantially dependent on the performance of certain of its key employees, management and other certain personnel, specifically Hailey Bieber.” For founders, that sentence explains the earnout and the lock-up: a buyer paying for a personal brand needs the person to stay engaged.

How rhode has performed since closing

Under e.l.f., rhode has reported strong numbers. From the August closing through March 31, 2026, the 10-K says, rhode added $293.5 million in net sales to e.l.f.’s results, along with $112.8 million in net income. Chief executive Tarang Amin said in the May 2026 results release that “all five of our brands grew this year, with rhode and Naturium delivering particularly strong results.”

Distribution was set to change too. At signing, rhode sold mainly through its own website, and e.l.f. said it planned a first in-store partnership with Sephora across North America and the U.K. Moving from direct-to-consumer sales into a large retailer can be part of what a buyer is paying for, since an established company already has store relationships that a young brand lacks.

Founder lessons from the rhode elf acquisition

  • Read the headline as a maximum. Reuters summarized it as a US$1 billion purchase; the guaranteed part was $800 million.
  • Stock can be worth more, or less, by closing. rhode’s sellers received shares fixed at a pre-signing price that were booked higher at closing.
  • Earnouts reward staying. The second tier pays only for beating projections.
  • Know your key-person value. The buyer’s own risk factors name the founder.

Bieber’s personal share of the proceeds has not been disclosed in any of these filings. For other beauty exits, compare Kylie Cosmetics’ sale to Coty and Rare Beauty’s sale talks.

Frequently Asked Questions

How much did e.l.f. pay for rhode?

e.l.f. agreed to pay $800 million at closing, $600 million in cash and $200 million in stock, plus a possible $200 million earnout. Its 10-K later recorded a purchase price of $897.5 million.

When did the rhode deal close?

e.l.f. said in an SEC filing that it completed the acquisition on August 5, 2025.

What is the rhode earnout?

Up to $100 million if rhode hits revenue projections over three years after closing, and up to another $100 million for beating them by a specified amount, per e.l.f.’s 8-K.

How much does rhode sell?

e.l.f. disclosed $212 million of net sales for the 12 months to March 31, 2025, and $293.5 million of rhode net sales from the closing date through March 31, 2026.

Does Hailey Bieber still work at rhode?

Yes. e.l.f. said she would remain Founder and become Chief Creative Officer and Head of Innovation. Its 10-K calls her performance central to the brand.

Sources

This article is general information for founders and is not accounting, legal or investment advice. Net worth figures are estimates published by the outlets named, on the dates shown. They are not disclosed by the people profiled, they move with markets and private valuations, and different publications reach different numbers. Found Founders is not affiliated with anyone profiled here.