Saturday, August 17, 2019

Saturday, August 17, 2019

TURNING POINT BRANDS: Acquires Solace Technologies and Expands Nu-X Team


Turning Point Brands issued the following announcement on July 19.

Turning Point Brands (NYSE:TPB), a Kentucky-based industry leading marketer of Other Tobacco Products (OTP) and adult consumer alternatives, announced it will acquire the assets of Solace Technologies (“Solace”) for $15.25 million. Solace is an innovative product development company which established one of the top e-liquid brands in the vapor industry and has since grown into a leader in alternative products. The Solace assets and team will be combined with TPB’s Nu-X Ventures division, led by TPB veteran Graham Purdy. As part of the transaction, Nu-X Ventures will establish a headquarters in Southern California.

“The original Solace Salts product brought highly innovative change to the nicotine delivery industry. When we first met the Solace team and saw the collection of new product offerings and technologies in the Solace pipeline, we immediately saw the perfect fit with our Nu-X team. This acquisition takes an already robust Nu-X product portfolio to the next level”, said Graham Purdy, President of Nu-X Ventures. “The Solace organization has demonstrated an ability to develop popular brands and produce quality products that meet adult consumer needs. The Nu-X and Solace teams are excited to come together to create the next evolution in the alternative product consumer experience.”

Solace’s legacy and new innovative products will be combined with Nu-X Ventures’ strong and nimble development engine. Nu-X Ventures was formed to leverage TPB’s expertise in traditional OTP management and its extensive distribution network to alternative products including synthetic nicotine and hemp-derived products. TPB has over 100 years of collective management team experience navigating complex federal, state and local regulations that are directly applicable to the growing alternatives market. TPB’s large traditional sales and distribution network provide the infrastructure to reach approximately 185,000 retail outlets in North America and millions of consumers through its B2C sales engine.

“This transaction will enable our team to build a sustainable and scalable future for the various customers and distributors who rely on Solace products. We look forward to continuing to innovate and transform the alternative products industry in coming years,” said Lorenzo De Plano, President and Co-Founder of Solace Technologies.

Total consideration of the deal is $15.25 million, consisting of $8.25 million in cash and $7.0 million of performance-based restricted stock units of TPB. The performance-based restricted stock units will vest over three years as determined by sales performance of Nu-X products. 2018 Sales and EBITDA for Solace was approximately $10 and $3 million, respectively after adjusting out certain transactions that would be considered intercompany.

About Turning Point Brands, Inc.

Louisville, Kentucky-based Turning Point Brands, Inc. (NYSE: TPB) is a leading U.S. provider of Other Tobacco Products. TPB, through its focus brands, Stoker’s® in Smokeless products, Zig-Zag® in Smoking products and VaporBeast®, VaporFi® and Nu-X™ in NewGen products, generates solid cash flow which it uses to finance acquisitions, increase brand support and strengthen its capital structure. TPB does not sell cigarettes. More information about the company is available at its corporate website, www.turningpointbrands.com.

Original source can be found here

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