Category: Mergers and Acquisitions

  • BMJ Affiliate to Buy Mativ Papers Business

    BMJ Affiliate to Buy Mativ Papers Business

    Photo: SWM

    BMJ affiliate Evergreen Hill Enterprise has offered $620 million to acquire Mativ Holding’s engineered papers (EP) business, which supplies papers to the tobacco industry.

    “While a solid business, EP’s concentration in the tobacco industry is not aligned with Mativ’s long-term ambition and presents a more attractive value proposition under new strategic ownership,” said Mativ CEO Julie Schertell in a statement. “Our talented and dedicated employees will continue to deliver outstanding products and service to EP’s long-standing customer base, and we are confident in a smooth transition.”

    Mativ intends to use the proceeds of the proposed transaction to pay down debt.

    Subject to customary closing conditions, including regulatory approvals and satisfaction of the consultation process with the applicable works councils in France, the proposed transaction is expected to close in the fourth quarter of 2023

    Based in Singapore Evergreen Hill Enterprise is part of a successful, Indonesian-based privately held group of diversified companies serving the tobacco, banking and consumer electronics industries, among other sectors.

    The buyer is expected to fund the proposed transaction with existing cash balance and is not dependent on capital markets for financing

    Mativ Holding was created out of the 2022 merger between Schweitzer-Mauduit International and Neenah, two leading global manufacturers of specialty materials.

    BMJ said its business would continue to operate as usual. “There will not be an integrated structure between BMJ and SWM so that both companies will maintain the autonomy of action and confidentiality of projects,” the company wrote in a statement.

    “Having said that, BMJ is delighted to be affiliated with SWM, a prominent supplier of engineered papers. This affiliation will open opportunities for BMJ to collaborate with SWM in some strategic areas, including, but not limited to offering complimentary geographic reach and product lines, ultimately providing comprehensive and unparalleled value to the customers and stakeholders.”

  • Philip Morris to Acquire Syqe Medical

    Philip Morris to Acquire Syqe Medical

    Image: Tobacco Reporter archive

    Philip Morris International plans to acquire Syqe Medical, an Israeli company, according to Calcalist. The deal could reach $650 million.

    Syqe’s main product is a metered-dose inhaler for pain reduction using medical marijuana.

    PMI will initially invest $120 million to aid in the process of obtaining U.S. Food and Drug Administration approval for Syqe’s inhaler. If approval is received, PMI will purchase all shares of Syqe for $650 million.

    PMI subsidiary Vectura will conduct the transaction.

    In 2016, PMI invested $20 million in Syqe.

  • Imperial Acquires TJP’s U.S. Nicotine Pouches

    Imperial Acquires TJP’s U.S. Nicotine Pouches

    Image: Rawpixel.com | Adobe Stock

    Imperial Brands acquired a range of nicotine pouches from TJP Labs in order to facilitate its entry into the U.S. modern oral market.

    The transaction will enable ITG Brands, Imperial’s U.S. operation, to offer legal adult American consumers a diverse range of 14 product variants in a pouch, which performs strongly in consumer testing.

    Following further consumer testing, ITG Brands will relaunch this range in 2024 under a new brand, which will be supported by the company’s existing U.S. sales force.

    TJP Labs, a Canada-based manufacturer, will continue to manufacture the oral nicotine pouches under contract for ITG Brands.

    Stefan Bomhard, group CEO of Imperial Brands, said, “Today’s transaction is aligned to our focused, challenger approach in next-generation products and to our disciplined capital allocation framework.

    “While it will take time to build our presence in this category, the proposition we are acquiring is clearly differentiated within the U.S. market and has tested strongly with consumers.”

    Kim Reed, president and CEO of ITG Brands, said, “This is an opportunity to expand our next-generation product offerings in the U.S. and to be able to offer our legal adult consumers a wider range of product options. We look forward to a long and successful partnership with TJP Labs.”

    David Richmond-Peck, CEO of TJP Labs, said, “Imperial has extensive brand development, marketing and sales execution capabilities in the U.S. and a long global track record of operating responsibly. We look forward to a strong and ongoing partnership.

    “This transaction supports TJP Labs’ commitment to developing and producing products to promote global harm reduction, consumer choice and flexibility.”

    Imperial already markets modern oral products in selected European markets under the Zone X and Skruf brands.

  • Kaival Releases Details of Acquired Patents

    Kaival Releases Details of Acquired Patents

    Image: Tobacco Reporter archive

    Kaival Brands Innovations Group provided additional details of its recently acquired extensive patent portfolio from GoFire as it looks to expand its current product offerings to explore near-term and long-term revenue opportunities, according to GlobeNewswire.

    In the near term, Kaival Brands expects to seek third-party licensing opportunities in the cannabis, hemp/CBD, nicotine and nutraceutical markets as a means of monetizing its new patents. Longer term, the company believes it can utilize the acquired patents to create innovative and market-disruptive products for its growing base of adult consumers, including patent protected vaporizer devices and related hardware and software applications.

    The consideration for the purchased patents consisted primarily of Kaival Brands equity securities, consisting of common stock, newly designated Series B Preferred Stock and a warrant to purchase common stock. Importantly, in certain key aspects, the equity consideration was structured in a forward-looking manner with valuations or exercise prices struck at premiums to the current market price of Kaival Brands’ common stock. The weighted price per share of the common stock issued and the common stock underlying the Series B Preferred Stock was $1.53 per share on the May 30 closing date, accompanied by warrants with exercise prices ranging from $3 and $6.

    Included in the acquired technologies are patented systems and methods that are designed to overcome common issues regarding reliability and consistent dispensing over the entire life of a cartridge or reservoir as well as improvements to the vaporizing chamber to ensure complete vaporization with minimum residue.

    The acquired patent portfolio includes the following: Bluetooth Child Safety App and Mechanical Cartridge Protection; Controlled Delivery; Flavor Delivery and Experience to Last Puff; Leak Proof Design and Removal of Cutting Agents; Authentication System/Counterfeit Protection; Dry Puff Protection; 510 and Pod Compatibility; Product Remaining Indicators; and MHRA Requirements.

    The GoFire patent portfolio includes 12 existing patents and 46 pending applications with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the EPO (European Patent Organization), Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.

    The acquired assets are housed in Kaival Labs, a wholly owned subsidiary of Kaival Brands, which develops new branded and white label products and services in the vaporizer and inhalation technology sectors.

  • Kaival Brands Acquires Patents from GoFire

    Kaival Brands Acquires Patents from GoFire

    Image: Tobacco Reporter archive
    Eric Mosser | Image: Tobacco Reporter archive

    [T]he purchase of this extensive patent portfolio marks the first step in diversifying our product offerings for adult consumers and potential revenue streams.”

    Eric Mosser, president and CEO, Kaival Brands

    Kaival Brands Innovations Group has acquired an extensive patent portfolio from GoFire Inc. with the goal of diversifying its product offerings and creating near-term and longer term revenue opportunities. 

    The acquired assets will be housed in Kaival Labs, a wholly owned subsidiary of Kaival Brands, which develops new branded and white label products and services in the vaporizer and inhalation technology sectors.

    In the near term, Kaival Brands expects to seek third-party licensing opportunities in the cannabis, hemp/CBD, nicotine and nutraceutical markets as a means of monetizing its new patents. Longer term, the company believes it can utilize the acquired patents to create innovative and market-disruptive products, including patent-protected vaporizer devices and related hardware and software applications.

    The GoFire patent portfolio includes 12 existing patents and 46 pending patents with novel technologies across extrusion dose control, product preservation, tracking and tracing usage, multiple modalities (i.e., different methods of vaporizing) and child safety. The patents and patent applications cover territories including the United States, Australia, Canada, China, the European Patent Organisation, Israel, Japan, Mexico, New Zealand and South Korea. The portfolio also includes a proprietary mobile device software application that is used in conjunction with certain patents in the portfolio.

    “This is a transformative asset acquisition for Kaival Brands,” stated Eric Mosser, president and chief operating officer of Kaival Brands. “As we look to the future of our company beyond our core Bidi Stick distribution business, the purchase of this extensive patent portfolio marks the first step in diversifying our product offerings for adult consumers and potential revenue streams. We are already exploring near-term, revenue generating opportunities through royalty-based licensing agreements with third-party partners in the cannabis, hemp/CBD, nicotine and nutraceutical spaces. Our longer term plan is to incorporate this intellectual property into new, adult-focused products and expand into new segments such as cannabis/hemp, nutraceutical and pharmaceutical markets that we can sell ourselves through existing and potential new distribution partners once all necessary regulatory clearances have been obtained. Additionally, we believe that the portfolio provides us with certain strategic advantages due to the limited number of patents in the vaporizer space. In short, we believe this forward-looking acquisition, with the acquisition consideration structured in key respects at premiums to the current market value of our common stock, broadens and strengthens our company and our prospects considerably as we seek to drive value for our stockholders.” 

    Nirajkumar Patel, chief science and regulatory officer of Kaival Brands and owner of Bidi Vapor, stated, “We believe these patents and patent applications represent a valuable opportunity to increase our product portfolio and diversify revenue streams. From a science perspective, these patents are innovative with novel applications, and we look forward to developing these patents into commercial or pharmaceutical products for adult consumers. From a regulatory point of view, there are only so many patents in the vaporizer space, and we believe that acquiring an extensive portfolio such as this is a wise strategic purchase for the long-term success of Kaival Brands.”

    Peter Calfee, CEO of GoFire, stated, “We are excited to place these valuable assets into Kaival’s hands. After working hard to create this intellectual property with a goal of providing safer and healthier products to the marketplace, we engaged in a comprehensive assessment of how best to further its development into actual products and services with consumer reach. At the end of that process, we chose to invest our patent portfolio in Kaival in exchange for Kaival equity as the right fit for our technology. We have confidence in Kaival’s management team and board of directors as Kaival seeks to further develop and ultimately monetize this technology for the benefit of all Kaival stockholders, including GoFire’s stockholders. We look forward to realizing the potential market strength of this patent portfolio with Kaival.”

  • Altria Completes Acquisition of Njoy

    Altria Completes Acquisition of Njoy

    Image: Tobacco Reporter archive

    Altria Group has completed its acquisition of Njoy Holdings. The tobacco giant has also updated its guidance for 2023 full-year adjusted diluted earnings per share (EPS) in connection with the transaction.

    “The completion of this transaction is a transformative step in our goal of ‘Moving Beyond Smoking,’” said Billy Gifford, Altria’s CEO. “We are pleased to have received antitrust clearance, and we are now fully focused on responsibly accelerating U.S. adult smoker and adult vaper adoption of Njoy Ace, currently the only pod-based e-vapor product to receive marketing authorization from the FDA.

    “Our updated 2023 full-year EPS guidance range includes planned investments behind the U.S. commercialization of Njoy Ace and reflects our goal to deliver strong shareholder returns while making progress toward our vision.”

    “We are excited to combine our resources with Njoy’s talented team to benefit adult tobacco consumers across the country,” said Shannon Leistra, the new president and CEO of Njoy.

    As a result of the transaction, Altria expects to deliver 2023 full-year adjusted diluted EPS in a range of $4.89 to $5.03, representing a growth rate of 1 percent to 4 percent from an adjusted diluted EPS base of $4.84 in 2022.

    “Our 2023 full-year adjusted diluted EPS guidance range includes planned investments in support of the company’s vision, such as (i) continued smoke-free product research, development and regulatory preparation expenses, (ii) enhancement of the company’s digital consumer engagement system and (iii) marketplace activities in support of the company’s smoke-free products, including planned investments behind the U.S. commercialization of Ace,” Altria wrote in a press note.

    Altria’s updated guidance range also includes estimated amortization charges of approximately $50 million for the remainder of 2023 related to intangible assets acquired in the transaction.

  • Scandinavian Tobacco Group Acquires XQS

    Scandinavian Tobacco Group Acquires XQS

    Scandinavian Tobacco Group is acquiring substantially all assets of XQS International in Sweden The transaction value consists of an upfront payment as well as an earnout agreement, STG announced in a press note.

     Assuming all targets are met, the total purchase price will be about DKK150 million ($22.19 million), and it will be fully financed by cash at hand and debt.

    XQS is active in smoke-free products, and its products are primarily sold in Sweden. In 2022, XQS’ reported net sales were about DKK50 million with a low single-digit EBITDA margin and a total volume of 3 million cans.

  • Altria in Talks to Buy Njoy

    Altria in Talks to Buy Njoy

    Image: Tobacco Reporter archive

    Altria Group is in advanced talks to buy e-cigarette startup Njoy Holdings for at least $2.75 billion, the Wall Street Journal reported, citing people familiar with the matter, according to Reuters.

    The Njoy deal could be announced as soon as this week, though the talks could still fall through, according to the report.

    The proposed deal includes an additional $500 million earnout if regulatory milestones are met.

    The potential deal follows Altria’s decision last year to be released from its noncompete deal with Juul Labs almost four years after buying a 35 percent stake in the company. Altria was planning to divest its stake in Juul. As of Dec. 31, Altria valued the stake at $250 million.

    It was reported in July that Njoy had hired bankers for a possible sale of the company. The privately held firm is likely to be valued at up to $5 billion.

    Njoy has a roughly 2 percent of the U.S. vape market by volume, according to Jefferies, Juul, by contrast, accounts for around a quarter of American vapor product sales.

    Unlike Juul, however, Njoy is one of the few vape brands that have permission from the U.S. Food and Drug Administration to continue to sell its products. Juul is waiting to hear whether the FDA will allow its e-cigarettes to remain on the market.

    In June 2022, the agency ordered Juul to remove its products from the market after finding that premarket tobacco product application failed to prove they would “appropriate for the protection of public health.

    The FDA agreed to take another look at Juul’s application after the company appealed the marketing denial order in court. The company can continue selling its products at least until the agency makes a final decision.

    Altria is keen to supplement its income from combustible products with earnings from smoking alternatives, such as e-cigarettes.

    Its cigarette sales volumes fell 9.5 percent last year as high gasoline prices and general inflation pinched smokers’ disposable income.

  • Scandinavian to Acquire Alec Bradley Cigars

    Scandinavian to Acquire Alec Bradley Cigars

    Scandinavian Tobacco Group has agreed on the terms and conditions for the acquisition of substantially all assets of Alec Bradley Cigar Distributors Inc. and associated companies, according to a company press release.

    The transaction is valued at $72.5 million (DKK500 million) on a debt and cash-free basis (the enterprise value) and is expected to be closed shortly. The acquisition will be fully financed by cash at hand and debt.

    The Alec Bradley brand is a material addition to the company’s portfolio of premium cigars.

    Based in Fort Lauderdale, Florida, Alec Bradley reported annual net sales in 2021 of $25 million and an EBITDA margin before special items of 24 percent. Both net sales and EBITDA margin improved during 2022.

    CEO of Scandinavian Tobacco Group Niels Frederiksen said, “The acquisition of the Alec Bradley cigar business is another important step toward our ambition of becoming the undisputed and sustainable global leader in cigars.

    Through this bolt-on acquisition, we will expand our portfolio of highly regarded premium cigars in the U.S. and international markets, delivering material value to our shareholders. We will also leverage the Alec Bradley brand portfolio to deliver increased excitement to the handmade cigar category through product innovation and brand activations, benefitting both the cigar enthusiasts and our trade partners.” 

    The transaction is expected to be margin accretive, EPS accretive and ROIC accretive when fully integrated. The company leverage ratio (net interest-bearing debt/EBITDA) will, when the transaction proceeds to completion, increase by less than 0.2x.

    At the end of the third quarter of 2022, the company’s leverage ratio was 1.9x. Further details of the expected financial impact of the acquisition will be communicated in connection with the announcement of Scandinavian Tobacco Group’s full-year 2022 results on March 8, 2023.

  • 22nd Century Acquires RX Pharmatech

    22nd Century Acquires RX Pharmatech

    Image: mikefoto58 | Adobe Stock

    22nd Century Group acquired privately held RX Pharmatech (RXP), a leading United Kingdom distributor of cannabinoids with 1,276 novel food applications with the U.K. Food Standards Agency (FSA), according to a company press release. Terms of the agreement include an up-front payment of $650,000 in cash and stock and a three-year equity earn-out based on revenue milestones.

    “The acquisition of RXP establishes GVB as the leader in the U.K. Consumer Products isolate market, which is expected to reach an estimated $1.26 billion by 2025 and secures direct access to key European markets for CBD products,” stated James A. Mish, CEO of 22nd Century Group. “RXP has exclusively utilized GVB’s technical data and worked closely with the FSA on developing their highly effective application and compliance programs that secured 1,276 novel food applications, the second most CBD products to pass through the first round of approval. We look forward to leveraging their leadership team’s vast cannabis industry experience and strong relationships with U.K. and EU regulatory agencies as we move forward.”

    Mish continued, “We expect the addition of RXP will be immediately accretive to the company and facilitate significant operating efficiencies leading to additional revenue and gross margin improvement. In particular, the addition of RXP with our recently opened distribution facility in the Netherlands will allow us to scale our operations and capture more market share in the growing European Consumer Products market.”

    RXP’s products include CBD isolate and numerous variations of finished products like gummies, oils, drops, candies, tinctures, sprays, capsules and others.