The deal will be funded through a combination of cash, debt and $300m in deferred payments to the sellers.
It will make ELC the sole owner of the Tom Ford brand and all its intellectual property.
Launched in April 2005 by fashion designer Tom Ford, the brand partnered with Marcolin Group to produce and distribute optical frames and sunglasses.
In 2006, it also partnered with ELC to introduce Tom Ford Beauty, offering a differentiated collection of fragrance, makeup and skincare products.
The acquisition is intended to advance Tom Ford Beauty’s growth in key markets for luxury and online channels worldwide.
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For the fiscal year ending on 30 June, the brand recorded a net sales growth of nearly 25%.
ELC president and CEO Fabrizio Freda said: “We are incredibly proud of the success Tom Ford Beauty has achieved in luxury fragrance and makeup and its dedication to creating desirable, high-quality products for discerning consumers around the world.
“As an owned brand, this strategic acquisition will unlock new opportunities and fortify our growth plans for Tom Ford Beauty.
“It will also further help to propel our momentum in the promising category of luxury beauty for the long-term, while reaffirming our commitment to being the leading pure player in global prestige beauty.”
ELC’s acquisition of the Tom Ford brand is expected to close in the first half of next year subject to certain conditions being met, including regulatory approvals.
Tom Ford will serve as the brand’s creative visionary until the end of next year.
In a separate development, ELC has signed a long-term licensing agreement with Ermenegildo Zegna for Tom Ford’s fashion products.
The licensing agreement depends on ELC’s acquisition of Tom Ford being cleared.