Altria Acquires E-Cig Company Green Smoke
Altria, the company formerly known as and now total owner of tobacco giant Philip Morris, has announced that it is acquiring electronic cigarette company Green Smoke. The acquisition is happening through Altria’s electronic cigarette subsidiary Nu Mark LLC. The purchase will ring in with a $110 million price tag (plus up to $20 million in bonus incentives for retained management).
Altria owns Philip Morris which is one of the three companies considered Big Tobacco in the US (alongside Lorillard and R.J. Reynolds). Philip Morris US owns the Marlboro,Virginia Slims, Parliament and other tobacco cigarette brands. Altria separated itself from Philip Morris in 2003 (though it still owns 100% of the brand) in order to create some distance between the core business unit and tobacco cigarettes.
Nu Mark was created by Altria to delve into the electronic cigarette market, but activity with Nu Mark has been rather limited and it appears the company felt it needed something more. The purchase of Green Smoke is the second major purchase of an electronic cigarette company by a major US-based tobacco company. The first was the purchase of Blu e-cigs by Lorillard in April of 2012 for around $135 million.
Green Smoke itself is one of the earlier e-cig companies to jump into the market and start growing rapidly. It started in 2008 and its sales for 2013 were in the neighborhood of $40 million.
Similar to statements around the purchase of Blu by Lorillard, Altria statements about the purchase of Green Smoke are focusing significantly on the complimentary culture of the new acquisition. Like Blu, Green Smoke has a distinct and easily recognizable product (it’s probably no coincidence that both companies are named after colors). Blu eluded to a cool and sleek product while Green Smoke suggested a cleaner and healthier alternative without saying as much outright.
The purchase is expected to complete in the second quarter of this year.