ITG Brands, a subsidiary of tobacco company Imperial Brands PLC, has acquired Chicago-based smokeless tobacco company Black Buffalo.
The deal is initially valued at $150 million, with an additional deferred sum based on performance over three years, ITG said Wednesday.
ITG said the deal strengthens its position across the U.S. oral nicotine category and complements its existing zone nicotine pouch brand.
“The oral category continues to evolve rapidly, and this acquisition further strengthens our ability to compete and grow across differentiated segments,” said Kim Reed, president and CEO of ITG Brands. “Black Buffalo broadens our oral portfolio beyond nicotine pouch offerings and expands the range of products we can offer legal adult consumers.”
As part of the transaction, the Black Buffalo team will be joining the Imperial Brands team.
“Black Buffalo was built on innovation, deep consumer insights and a commitment to differentiated alternatives for adult consumers,” said Mark Hanson, co-founder and president of Black Buffalo. “We are excited about the opportunity with our new colleagues to combine our brand and product expertise with their scale, resources and commercial capabilities.”
Imperial Brands CEO Lukas Paravicini said the acquisition reflects the company’s disciplined and focused approach to building a stronger next generation product portfolio.
“Black Buffalo is a strong, challenger brand with a highly differentiated proposition and complements our broader growth strategy,” he said.
Black Buffalo is manufactured in North Carolina from U.S.-grown barn-cured leafy greens, with pharmaceutical-grade nicotine and food-grade flavor added. Compared to ITG's existing range of flavored nicotine pouches with its zone brand, the company said Black Buffalo offers a differentiated experience and appeals to different consumers.
“Combining Black Buffalo's clearly defined brand and differentiated products with Imperial's commercial infrastructure and sales execution capabilities will enable greater choice for legal adult consumers seeking alternative non-combustible oral products as part of broader tobacco harm reduction efforts, while supporting accelerated revenue growth,” ITG said.
Morgan Stanley & Co. International PLC, KPMG LLP and White & Case LLP advised Imperial Brands on the transaction and Goldman Sachs & Co LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Black Buffalo.
ITG Brands, Greensboro, North Carolina, is a member of the Bristol, England-based Imperial Brands family.
Founded in 2015, Black Buffalo produces alternative, smokeless-tobacco products, which include long-cut and pouch varieties, all of which contain pharmaceutical-grade nicotine but no tobacco leaf or tobacco stem.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.