Ecig company acquisition seems like a trend in today’s electronic cigarette industry. It is quite common to hear how one ecig firm, established and all, has been purchased by bigger entity. This bigger entity could be another ecigarette firm, a tobacco company or any business unrelated to electronic cigarettes and/or tobacco.
To push through or not with the ecig company acquisition would essentially depend on the stances of parties involved. Some would see the partnership opportune while others would think it is not.
Genius-ZenCig: To Buy, A Unique Agreement
Genius Properties Ltd. has entered a letter of intent in acquiring (via a subsidiary) 70% interest of Zen Cigarette Inc. assets. ZenCig is a firm specialized in the processing and distribution of electronic cigarettes.
The LOI’s basic terms for the assets acquisition involves the creation of a new corporation, Newco. Genius will have 70% interest at Newco while the current ZenCig owners will have 30% interest. Newco will purchase the assets of ZenCig for a combined 670,000 common shares of Genius priced at $0.25 per share and also 300,000warrants for the purchase of Genius common shares.
ZenCig assets include goodwill, inventory, web domain name, intellectual property, distribution rights and permits. Genius will take over Newco’s corporate affairs so it is expected that the current management team of ZenCig will manage the day-to-day operations.
President Stephane Leblanc of Genius commented that this is a very exciting project, a transaction that brings immediate revenues to the company and will drive Genius to a higher level. After all, Genius is primarily involved in discovering new world-class deposits. The company is an excellent partner of exploration companies as well as capital pool companies.
The transaction is expected to conclude no later than July 4, 2014.
EC Smokes-Eonsmoke: Not To Buy
EC Smokes is an established leading entity in rechargeable ecigarettes, eliquids, vaporizers and e-hookahs. Recent rumors have it that EC is involved in an ecig company acquisition plans by Eonsmoke. Apparently, this is only a rumor that EC has denied.
EC stated that they are in no way involved with any purchase negotiations with Eonsmoke. It is true that tobacco giants and other companies are getting involved in the ecig arena, considering purchasing smaller firms. However, EC smokes stated that it remains loyal to the customers who want access to authentic vaping products at prices they can afford.
Joe Provenzano, the company spokesman, said that since their distributors have been inquiring about this issue, they have decided that it is best that distributors, suppliers, investors and customers be publicly assured that EC Smokes is not pursuing any transaction to sell itself to Eonsmoke at the moment.
Latest Acquisition In The Ecig Industry
Numerous brands of ecigarettes have been acquired in the past years. Blu was most likely the first to be bought by Lorillard in April 2012. Last year, Lorillard also purchased a UK brand, Skycigs, which is now marketed as Blu. Altria has also purchased another ecigarette brand, Green Smoke. Imperial Tobacco also acquired the electronic cigarette division of the company established by the recognized inventor of ecigarettes, Hon Lik.
The recent acquisition involved Japan Tobacco Inc that announced recently about its acquisition of outstanding shares of Zandera Ltd that is better known for its E-lites ecigarettes. Ecigs still comprise a very small fraction of the $100 billion worth tobacco industry.
The sector also remains fragmented and thus indicates that these fragments might be consolidated in the years to follow. Consolidation might be a good thing for the industry especially so that it is threatened by imminent regulations and restrictions.
Victory Electronic Cigarettes, a larger non-tobacco ecigarette company is also involved in not just one, but numerous acquisitions of other established brands. It has acquired Vapesticks, FIN ecigs, and more.