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Scandinavian Tobacco Group acquires a leading US online cigar retailer

Scandinavian Tobacco Group today signed an agreement to acquire the business of Thompson and Co. of Tampa, Inc. (“Thompson”). The purchase price amounts to USD 62 million and the acquisition will be financed by existing cash at hand. The closing of the deal is expected to take place by the end of March 2018. Thompson is a leading online retail cigar business in the US, a market where approx-imately two thirds of all handmade cigars are sold online. A family-owned business, Thompson was founded in 1915 and is based in Tampa, Florida. It has annual net sales of c. USD 100 million and 185 employees. Thompson provides Scandinavian To-bacco Group access to a substantial and attractive customer base, auction and retail websites as well as a retail store and a call centre facility in Tampa. CEO of Scandinavian Tobacco Group, Niels Frederiksen says: “I am pleased to an-nounce this acquisition which strengthens our position in the online retail channel in the US. Our existing US online retailer Cigars International will in combination with Thompson be able to deliver an unmatched range of premium cigars at the highest level of service to the US consumers. At the same time we foresee significant cost synergies to the benefit of our customers and shareholders.”

Bob Franzblau, CEO of Thompson, said: “Having spent 58 years making Thompson Ci-gar one of the most respected mail order cigar businesses in the country, it is now time to hand over the reins to a new owner that can continue to serve the long-term in-terest of the company. Becoming part of Scandinavian Tobacco Group will ensure an exciting future of opportunity for our employees, our customers and our suppliers.”
The acquisition of Thompson is expected to deliver material synergies and scale ben-efits with the margins of the combined businesses over time being lifted towards Ci-gars International’s existing level. Thompson is currently operating with low single digit EBITDA margins.

The acquisition is expected to have a positive impact on the Group’s adjusted EBITDA during 2019.