Cosmetics company E.l.f acquires Hailey Bieber's Rhode beauty brand for $1 billion

E.l.f. Beauty has acquired Hailey Bieber's Rhode skincare brand in a $1 billion deal, the companies said.

Bieber's Rhode had $212 million in net sales in the 12 months that ended March 31. The company's products are only available online, but by the end of this year it plans to begin an in-store partnership with Sephora in North America and the U.K.

Bieber, a model and the wife of singer Justin Bieber, will be Rhode's chief creative officer and head of innovation and also a strategic advisor to the combined companies.

Under the terms of the agreement, E.l.f. will acquire Rhode for $600 million in cash and $200 million of newly issued shares of E.l.f. Beauty common stock. The deal also includes an additional potential earnout of $200 million based on the future growth of the brand over three years.

Shares of E.l.f., based in Oakland, Calif., jumped 12% before the opening bell Thursday.