Scandinavian Tobacco Group has today agreed on the terms and conditions for the acquisition of all of the shares of Agio Beheer B.V. from Highlands Beheer B.V. Agio Beheer B.V. is the holding company of the Royal Agio Cigars group of companies (“Royal Agio”).
On a debt and cash free basis (the enterprise value), the transaction is valued at EUR 210 million. The acquisition will be financed by cash at hand and debt. The transaction is subject to satisfactory conclusion of a statutory employee consultation process in The Netherlands and subsequent completion will require approval from competition authorities in certain European jurisdictions. Completion of the transaction depends on the above-mentioned processes but is currently expected to occur in the first half of 2020. Details of the expected financial impact of the acquisition will be communicated after the consultation of the works councils and approval by competition authorities.
CEO of Scandinavian Tobacco Group, Niels Frederiksen says: “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, as it significantly strengthens our position in several key machine-made cigar markets in Europe and enables us to deliver an attractive range of cigars of the highest standards to our consumers.”
Royal Agio is a leading European cigar company with a strong cigar portfolio including key brands such as Mehari´s, Panter and Balmoral. The company is based in Duizel, The Netherlands and has approximately 3,200 full-time employees. Royal Agio’s reported annual net sales full year 2018 were EUR 133 million (DKK 995 million) with an EBITDA of EUR 18 million.
Royal Agio can provide Scandinavian Tobacco Group access to a strong product portfolio and important market positions in key European machine-made cigar markets. The acquisition can secure leading positions in France, Belgium and The Netherlands and significantly improve the position in key cigar markets such as Spain and Italy. If the transaction is completed, the proforma combined group net sales for 2018 would be approximately DKK 7.7 billion with a combined workforce of more than 10,000 employees.