British American Tobacco Plc took another step in its international expansion with an agreement to buy Croatian market leader TDR.
The acquisition from Adris Grupa values central Europe’s biggest independent cigarette maker at 550 million euros ($602 million), including debt, BAT said Monday. TDR also has businesses in Bosnia and Serbia.
The deal comes at a time when BAT is also seeking to boost its presence in Brazil by acquiring the stake it doesn’t already own in that country’s market leader Souza Cruz SA. TDR will give the company the opportunity to significantly grow its business in central Europe.
TDR had earnings before interest, tax, depreciation and amortization of about 44 million euros in 2014, giving an acquisition multiple of about 12.5 times.
BAT said it has committed to keeping TDR’s manufacturing facility in Kanfanar, Croatia, operational for at least five years following completion of the acquisition.