Imperial Brands buys Black Buffalo for $150m

(Sharecast News) - Imperial Brands said on Wednesday that it has bought Black Buffalo, a US producer of smokeless tobacco alternatives, for an initial consideration of $150m.

Established in 2015, Black Buffalo's tobacco alternative long cut and pouch products are designed specifically for legal adult consumers of traditional moist smokeless tobacco (MST). Imperial Brands said they closely replicate the taste, ritual, and branding of traditional products to emulate the experience of MST without tobacco leaf or stem.

As well as the initial consideration, there is a deferred sum based on performance over three years and other criteria. Imperial Brands said this is consistent with its capital allocation policy to invest in the business strategy through bolt-on transactions.

Chief executive Lukas Paravicini said: "This acquisition reflects our disciplined and focused approach to building a stronger next generation product portfolio in markets where we see attractive long-term growth opportunities. Black Buffalo is a strong, challenger brand with a highly differentiated proposition and complements our broader growth strategy."

Mark Hanson, co-founder and president of Black Buffalo, said: "Black Buffalo was built on innovation, deep consumer insights and a commitment to differentiated alternatives for adult consumers. We are excited about the opportunity with our new colleagues to combine our brand and product expertise with their scale, resources and commercial capabilities."

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