Scandinavian Tobacco Group Acquires Mac Baren Tobacco for DKK 535 Million to Strengthen Global Market Position
Danish Scan (STG), the Navian tobacco group. Has announced that it has agreed with Halberg and Halberg Halberg to acquire Macc Barron Tobacco for DKK 535 million (approximately $76.7 million). The transaction, financed with cash and debt, is expected to significantly improve STG’s global pipe tobacco market position and increase the group’s profitability and shareholder value when fully integrated.
Details of the Acquisition
Date of announcement and official statement from STG
On June 27, Denmark’s Scandinavian Tobacco Group (STG) said in a statement on its official website that Halberg has partnered with Halberg (Halberg) to acquire all of its Mac Baren Tobacco Co. shareholdings under the terms and conditions.
Transaction value: DKK 535 million (approximately $76.7 million)
The value of the deal is based on 535 million Danish kroner (about $76.7 million), with no debt and no cash. The acquisition will be financed with cash and debt.
Overview of key brands:
Mac Baren Cigarettes is a family-owned company founded in 1826. Which includes the Macc Baren. Amphora and Holger pipe tobacco brands, as well as the fine tobacco brands Amsterdamer, Choice, and Opal, also produce and sell nicotine bags under the ACE and GRITT brands.
About Mac Baren Tobacco Company
Mac Barron’s products are sold in 74 countries. Most of these are generated primarily in the United States, Denmark, and Germany. With other key markets including the United Kingdom, France, Spain, and Italy. The company is headquartered in Svendborg, Denmark, and has manufacturing facilities in Denmark and Richmond, Virginia, respectively. The company employs around 200 full-time employees.
Financial Overview of Mac Baren
Mac April 2024, Baren’s annual net sales amounted to DKK 723 million ($103 million). While its reported EBITDA (earnings before taxes, interest, depreciation, and amortization) amounted to DKK 85 million, the report showed. The nicotine bags business contributed nearly 20% to net sales but made a slight loss to EBITDA.
Strategic Rationale Behind the Acquisition
Statements from Company Executives
Niels Frederiksen, CEO of STG, said:
- “With the acquisition of Mac, we are very pleased that Barron’s has taken an important step in strengthening our smoking business. The acquisition will strengthen our position in the global tobacco market and expand our range of the most attractive and highest-standard brands for consumers. Integration with our existing business is expected to create valuable synergies and deliver good value to our shareholders when fully integrated.”
Halberg A/S Torben Sørensen said:
- “Scandinavian Tobacco Group is acquiring a strong business with a lot of expertise, popular brands, and skilled employees. Since its inception in 1826, Mac Baren’s key DNA has been focused on new opportunities to ensure optimal competitiveness. With this in mind, it made sense to make the company a stronger group. It is a particular pleasure that ownership remains in Danish hands. It’s true for Mac that both Baren and Halberg are the best solution.”
Conclusion
STG said the impact of the 2024 annual financial guidance (excluding the Mac acquisition) for Baren Tobacco remains consistent. The financial impact of the acquisition will be announced immediately following the end of the integration plan period. The integration plan period is expected to take up to 120 days. Once fully integrated. The transaction is expected to be accretive to the Group’s profitability. Earnings per share and return on investment. If the transaction is completed. The Group’s leverage ratio (net interest debt/EBITDA) will temporarily exceed the 2.5 double target leverage ratio. The transaction will not affect up to DKK 8.5 billion (USD 120 million) of the pending share buyback program.
