Lorillard Acquires blu ecigs

$135 million deal offers expanded distribution capabilities for emerging product

GREENSBORO, N.C. -- Lorillard Inc. has acquired all of the assets of U.S. electronic cigarette manufacturer blu ecigs for $135 million in cash. Blu ecigs is a best-selling e-cigarette brand with the look and feel of traditional cigarettes, but without the tobacco smoke, ash or smell. And it is a market leader in providing technology for an improved consumer experience that enhances the enjoyment and social aspect of e-cigarettes.

blu ecigs will be a separate operating company of Lorillard, and it is Lorillard's intention to retain blu ecigs' current management team and its headquarters in Charlotte, N.C.

"blu ecigs are the perfect adjacency for us to participate in the smokeless market, but in a Lorillard way. That is, e-cigarettes offer many of the benefits of other smokeless products but do so in a way that is familiar and enjoyed by current adult cigarette consumers. We believe that blu will benefit from Lorillard Tobacco Co.'s regulatory experience and sales infrastructure, which are needed for it, and the category, to reach its potential in a responsible manner," said Murray S. Kessler, chairman, CEO and president.

"As one who has urged large tobacco companies to begin marketing e-cigarettes for the past three years, I'm pleased  Lorillard has acquired blu ecigs, and am confident this will benefit e-cigarettes, Lorillard, consumer and public health.  A win, win, win, win. I anticipate Altria, Reynolds and other tobacco companies also will begin marketing e-cigarettes, which should make these far less hazardous smokefree alternatives more accessible and appealing to cigarette smokers, and should encourage millions more to switch," Bill Godshall, executive director of Pittsburgh-based Smokefree Pennsylvania, said in an email to CSP Daily News and the industry.

"This is a very exciting move for me and my team," said Jason Healy, president and co-founder of blue cigs. "I am particularly excited about what this means for the brand and our customers. It gives us access to the tremendously experienced team and resources at Lorillard and will allow us to move to the next level on our expansion and product development. I'm happy to say that now as part of Lorillard, blu ecigs will be able to deliver an even greater level of quality and innovation to its customers that they have come to expect from blu."

He added, "From an operational point of view, it will be business as usual for our customers, retailers and other partners through a normal transitional period. Following this transition, we look forward to expanded distribution capabilities that will be communicated in the near future."

blu ecigs offer a realistic recreational alternative to smoking--creating a vapor "puff" that evaporates within seconds. blu ecigs are available in disposables or rechargeable packs for regular use, with or without nicotine and in a variety of flavors.

Greensboro, N.C.-based Lorillard Inc., through its Lorillard Tobacco Co. subsidiary, is the third largest manufacturer of cigarettes in the United States. Founded in 1760, Lorillard is the oldest continuously operating U.S. tobacco company. Newport, Lorillard's flagship menthol-flavored premium cigarette brand, is the top-selling menthol and second largest selling cigarette in the United States. In addition to Newport, the Lorillard product line has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different product offerings which vary in price, taste, flavor, length and packaging.

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