Scandinavian Tobacco Group Acquires Thompson Cigar

On January 31st, 2018, Scandinavian Tobacco Group signed an agreement to acquire Thompson and Co. of Tampa, Inc. (“Thompson Cigar”) for $62 million in an all cash deal. The closing of the deal is expected to take place by the end of March 2018.

Scandinavian Tobacco Group sells cigars, pipe tobacco, and raw tobacco. They also have over 200 brands, most of which you’ve never heard of. However, you’ve definitely heard of these: CAO, Cohiba, Foundry, La Gloria Cubano, Macanudo, and Partagas. They are headquartered in Denmark and have over 20 locations throughout the world.

According to the press release, “Thompson is a leading online retail cigar business in the US, a market where approximately 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 Tobacco 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. The acquisition of Thompson is expected to deliver material synergies and scale benefits with the margins of the combined businesses over time being lifted towards Cigars International’s existing level.”

The CEO of Scandinavian Tobacco Group, Niels Frederiksen says: “I am pleased to announce 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.”

I find the desire of Scandinavian Tobacco Group to take on Cigars International, well, pretty damn funny. More power to them!