The Estée Lauder Companies Inc. recently announced that it has signed an agreement to acquire the Tom Ford brand. The deal will establish it as the sole owner of the Tom Ford brand and all its intellectual property. The acquisition of Tom Ford Brands by Estée Lauder is expected to close in the first half of 2023, pending regulatory approvals. Under its stewardship, the purchase of the brand and the extension of its current licensing partners will allow for continuity and further evolution as one of the powerhouse global luxury brands today.
Per the statement by Estee Lauder Companies, “The deal values the total enterprise at $2.8 billion. The amount to be paid by Estee Lauder Companies for the acquisition is approximately $2.3 billion, net of a $250 million payment to Estee Lauder Companies at closing from Marcolin S.p.A. Estee Lauder Companies expects to fund this transaction through a combination of cash, debt and $300 million in deferred payments to the sellers that become due beginning in July 2025… Under the agreement, Tom Ford, Founder and CEO of Tom Ford International, will continue to serve as the brand’s creative visionary after closing and through the end of calendar 2023. Domenico De Sole, Chairman of Tom Ford International, will stay on as a consultant until that same time.”
Estee Lauder introduced its Tom Ford Beauty line in 2006 and since it is one of the cosmetics giant’s most lucrative businesses, posting strong growth even as some of the company’s other stalwart brands struggled. “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,” said Fabrizio Freda, President and Chief Executive Officer, The Estée Lauder Companies, in a statement “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.”
The deal will extend and expand the Tom Ford brand’s longstanding relationship with Ermenegildo Zegna N.V. to include a long-term license for men’s and women’s fashion as well as accessories and underwear. As part of this transaction, Zegna will acquire operations of the Tom Ford fashion business necessary to perform its obligations as licensee. Estee Lauder Companies and Zegna will align closely on the creative direction to continue building on the luxury positioning of the Tom Ford brand. The brand’s current license with Marcolin, one of the leading global eyewear manufacturers, known for its superior craftsmanship and quality, will also be substantially extended.
“I could not be happier with this acquisition as The Estée Lauder Companies is the ideal home for the brand. They have been an extraordinary partner from the first day of my creation of the company and I am thrilled to see them become the luxury stewards in this next chapter of the Tom Ford brand. Ermenegildo Zegna and Marcolin have been spectacular long-standing partners as well and I am happy to see the preservation of the great relationship that we have built over the past 16 years. With their full commitment, I trust they will continue the brand’s future as a luxury company that strives to produce only the highest quality fashion and eyewear,” Tom Ford states in a press release.
In this deal, Perella Weinberg Partners LP served as financial advisor to The Estée Lauder Companies Inc., and Paul, Weiss, Rifkind, Wharton and Garrison LLP served as legal counsel. Goldman Sachs and Co. LLC served as sole financial advisor to Tom Ford and Skadden, Arps, Slate, Meagher and Flom LLP served as legal counsel. Zegna received financial advice from UBS. Latham and Watkins LLC served as legal counsel to Marcolin.
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