Electronic-Cigarette Maker FIN Hires BB&T to Review Bid
FIN Branding Group LLC, a closely held maker of electronic cigarettes, has retained BB&T Corp. (BBT) to evaluate bids as private-equity firms and tobacco companies look to enter the market for the smoking alternative.
BB&T is receiving a “growing and steady” number of inquiries, FIN Chief Executive Officer Elliot Maisel, 58, said yesterday by telephone. Possible buyers include tobacco and drug companies as well as private-equity firms, he said, declining to identify companies that have expressed interest.
Consumption of electronic cigarettes -- battery-powered, nicotine-infused tubes designed to duplicate the puffing experience without smoke -- may surpass demand for traditional cigarettes in the next decade, according to Bonnie Herzog, an analyst at Wells Fargo & Co. in New York. The devices appeal to consumers concerned that smoking is unhealthy and aren’t allowed to smoke in offices, restaurants and other public places.
Potential investors “see the financial opportunity,” said Maisel, who started Atlanta-based FIN in 2011 and projects revenue of almost $70 million this year. He hired Winston-Salem, North Carolina-based BB&T late last year and said he’s open to joint venture or takeover offers from strategic buyers such as Reynolds American Inc. (RAI), Altria Group Inc. (MO), international tobacco companies or large pharmaceutical companies.
David Sylvia, an Altria spokesman, and Bryan Hatchell, a spokesman for Winston-Salem, North Carolina-based Reynolds, declined to comment in e-mails on whether their companies would be interested in talking to FIN.
Maisel is competing with Lorillard Inc. (LO)’s blu eCigs and closely held producers such as NJOY and LOGIC Technology.
LOGIC Technology, based in Livingston, New Jersey, has talked to many tobacco companies and financial firms interested in a possible combination, Chief Executive Officer Eli Alelov said in a telephone interview. He declined to identify the companies with which he’s talked.
“Investment bankers are trying to get into the space,” said Alelov, 45. He said he’s “interested in what other business partners could put on the table. I’m always open to suggestions.”
Altria, the largest seller of tobacco in the U.S., said last week it plans to introduce an e-cigarette in an undisclosed market in the second half of 2013. Chief Executive Officer Martin Barrington, speaking on a conference call with analysts, declined to comment on whether Altria was considering a takeover, saying the Richmond, Virginia-based company doesn’t speculate on potential acquisitions.
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