British American Tobacco said today that it had signed an agreement to acquire TDR, the leading independent cigarette manufacturer in Central Europe.
If the agreement receives the necessary approvals, BAT will acquire TDR and other tobacco and retail assets from Adris Grupa ‘for a total enterprise value of €550 million’.
TDR is said to have a market leading position in Croatia and positions of scale in Bosnia and Serbia, all of which will provide BAT with the opportunity to grow its business in the region ‘significantly’.
‘By combining its existing business in the region together with TDR, BAT expects to benefit from highly skilled people, well established brands, enhanced regional leaf processing capabilities, a local high quality factory and print facility, and strong relationships with distributors and retailers in these markets, BAT said in a note posted on its website.
‘As part of the transaction BAT has committed to keeping TDR’s manufacturing facility in Kanfanar, Croatia, operational for at least five years following completion of the acquisition.
‘The transaction represents a multiple of approximately 12.5 times (based on TDR’s financial year ending 31 December 2014 EBITDA of approximately €44 million).’
“This is an exciting acquisition for BAT, which will provide immediate scale in three core markets of Croatia, Bosnia and Serbia and establishes a sustainable platform to grow our business in Central Europe,” said Nicandro Durante, BAT’s chief executive.
The proposed acquisition is subject to a number of anti-trust approvals and Adris shareholder consent. The transaction is expected to complete in October 2015.
