On June 27th, the Danish tobacco company Scandinavian Tobacco Group (STG) announced on its official website that it has reached terms and conditions with Halberg Company for the acquisition of all shares in its subsidiary, Mac Baren Tobacco Co.
The value of this transaction, based on the absence of debt and cash, is 535 million Danish kroner (approximately 76.7 million US dollars). The acquisition will be financed through a combination of cash and debt.
Mac Baren Tobacco Company is a family business founded in 1826. It owns brands such as Mac Baren, Amphora, and Holger Danske for pipe tobacco, as well as brands like Amsterdamer, Choice, and Opal for fine-cut tobacco. The company also produces and sells nicotine pouches under the ACE and GRITT brands.
Mac Baren's products are sold in 74 countries, with the majority of net sales generated in the United States, Denmark, and Germany. Other key markets include the United Kingdom, France, Spain, and Italy. The company is headquartered in Svendborg, Denmark, and has production facilities in Richmond, Virginia in the United States and Denmark. The company currently has approximately 200 full-time employees.
According to a report, Mac Baren achieved a net sales revenue of 723 million Danish kroner (103 million US dollars) in April 2024, with reported EBITDA reaching 85 million Danish kroner. The nicotine pouch business contributed nearly 20% to net sales revenue, but had a slight loss in EBITDA contribution.
STG CEO Niels Frederiksen stated:
I am pleased that we have taken a significant step in strengthening our tobacco business by acquiring Mac Baren. This acquisition will solidify our presence in the global pipe tobacco market and expand our range of brands that are the most attractive to consumers and meet the highest standards. The integration with our existing business is expected to generate meaningful synergies once fully consolidated, and deliver good value for our shareholders.
Chairman of the board of Halberg A/S, Torben Sørensen, stated:
The Scandinavian Tobacco Group is acquiring a strong company with a wealth of expertise, beloved brands, and skilled employees. Since its founding in 1826, Mac Baren's core DNA has been focusing on new opportunities and ensuring optimal competitiveness. In light of this, making the company part of a stronger group is a wise move. Ownership will still remain Danish, which is particularly pleasing. This is the best solution for both Mac Baren and Halberg.
STG has stated that its full-year financial guidance for 2024 (excluding the impact of acquiring Mac Baren Tobacco Company) remains unchanged. The financial effects of the acquisition will be disclosed immediately after the completion of the integration planning period, which is expected to take up to 120 days. Once fully integrated, the transaction is expected to increase the group's profit margin, earnings per share, and return on investment. If the deal goes through smoothly, the group's leverage ratio (net interest-bearing debt/EBITDA) will temporarily exceed the target ratio of 2.5 times. The transaction will not affect the pending stock buyback plan worth up to 850 million Danish kroner (120 million US dollars).
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