e.l.f. Beauty Focuses on Strategic Acquisitions
e.l.f. Beauty is leveraging acquisitions to expand into new categories, particularly in self-care and wellness, according to a recent analysis. The company's strategy involves acquiring emerging, digitally native brands that resonate with younger consumers. It then integrates these brands into its own digital and omnichannel infrastructure to scale them rapidly.
- In August 2023, e.l.f. Beauty acquired skincare brand Naturium for $355 million in a deal of cash and stock. The acquisition was expected to double e.l.f. Beauty's footprint in the skincare category to approximately 18% of retail sales. - The company's first-ever acquisition was in February 2020, when it purchased clean beauty brand W3LL People for $27 million in cash. This move served as a strategic entry into the growing clean beauty segment. - In a major move into the prestige category, e.l.f. acquired Hailey Bieber's skincare brand, Rhode, in a deal valued at up to $1 billion. This was the company's largest acquisition and diversified its portfolio into new retail channels like Sephora. - The company also expands its portfolio by co-creating brands with celebrities, such as the 2020 launch of Keys Soulcare with Alicia Keys. This lifestyle beauty brand focuses on wellness and self-care. - The acquisitions are driven by Chairman and CEO Tarang Amin, who has stated the goal is to build a "different kind of beauty company" by adding brands that disrupt industry norms. - Following its acquisition, Naturium's distribution expanded into Ulta Beauty, as well as Shoppers Drug Mart in Canada and Boots in the UK, demonstrating e.l.f.'s ability to scale acquired brands. - At the time of its acquisition, Naturium was expected to generate approximately $90 million in net sales and $17 million in adjusted EBITDA for the year. The brand's products are sold through retailers like Target and Amazon.
