LOUISVILLE, Ky. -- Turning Points Brands Inc. (TPB) has acquired OTP distributor and digital platform International Vapor Group LLC (IVG) for about $28 million, the company said.
The Louisville, Ky.-based TPB said the sale, announced Aug. 6, expands its own business-to-business (B2B) platform with IVG’s business-to-consumer (B2C) platform. TPB’s B2B platform, VaporBeast, serves the retail, electronic-vapor and other tobacco products (OTP) distribution channel.
“IVG has played an important role in shaping the vaping industry since its inception through its commitment to the consumer experience with a world-class B2C infrastructure,” said Larry Wexler, president and CEO of TPB. “This greatly expands our capabilities across all of our selling channels.”
IVG markets and sells proprietary and third-party vapor products direct to adult consumers via an online platform under brand names such as VaporFi, South Beach Smoke and DirectVapor. Additionally, VaporFi provides an in-store experience at its corporate and franchise retail storefronts where consumers can receive advice on purchases from experienced employees. The company was founded in 2010 and is based in Miami Lakes, Fla.
The acquisition values IVG at approximately $28.5 million, or $24 million plus $4.5 million of contingent earnouts (or additional earnings based on performance in the future), TPB officials said. Officials said the acquisition broke down to $15 million in cash, a $5 million equivalent of TPB common shares and a $4 million 18-month promissory note. The contingent earnouts are based on performance metrics paid out at the end of two years. For the 12-month period ending June 30, IVG had revenue of approximately $47.7 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.9 million, the company said.
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