STG To Acquire Royal Agio For $231 Million
Denmark-based tobacco giant Balmoral, which is rolled in the Dominican Republic.
The transaction, according to STG, will be financed by “cash at hand and debt,” and is expected to be completed in the first half of 2020.
“Royal Agio can provide [STG] access to a strong portfolio and important market positions in key European machine-made cigar markets,” STG said in an official statement. “If the transaction is completed, the proforma combined group net sales for 2018 would be approximately DKK 7.7 billion [$1.1 billion] with a combined workforce of more than 10,000 employees.”
Founded in 1904, family-owned Royal Agio is based in Duizel, The Netherlands and has approximately 3,200 full-time employees. The company reported sales of 133 million euro ($146.5 million) in 2018, with earnings before interest, taxes, depreciation and amortization of 18 million euro (nearly $20 million).
Boris Wintermans, CEO of Royal Agio Cigars, said in a statement: “This decision has not been easy. We have a wonderful company with highly committed employees and loyal business partners, some of whom have been working with us for over 50 years. But the combination of the two companies will be in a better position to deal with the financial consequences of ever-increasing legislation and regulations.”
Balmoral in 2017.
Niels Frederiksen, CEO of STG, said: “I am very pleased and proud that we have taken this important step towards an acquisition of Royal Agio. If completed, the acquisition will be an important step in our ambition of becoming the global leader in cigars.”
Scandinavian Tobacco Group is among the giants of the cigar industry, responsible for such brands as the 2018 acquisition of cigar retailer Thompson & Co.
