Turning Points Brands, Inc. announced that it has acquired International Vapor Group, LLC (“IVG”). TPB is a leader in the Other Tobacco Products space and through its B2B platform, VaporBeast, serves the evolving channels of retail electronic vapor distribution. The acquisition of IVG will add one of the top vapor B2C platforms to the Turning Point Brands family.

IVG markets and sells a broad array of proprietary and third-party vapor products direct to adult consumers via a best-in-class online platform under brand names such as VaporFi, South Beach Smoke, and DirectVapor. VaporFi likewise provides an effective in-store experience at its corporate and franchise retail storefronts where consumers can receive knowledgeable advice on purchases from experienced employees. The company was founded in 2010 and is headquartered in Miami Lakes, Florida.

The acquisition values IVG at $24 million plus $4.5 million of contingent earnouts. Acquisition consideration comprises $15 million of cash, $5 million equivalent of TPB common shares and a $4 million 18-month promissory note. The contingent earnouts are based on performance metrics paid out at the end of two years. For the twelve-month period ending June 30, 2018, IVG had revenue of approximately $47.7 million and EBITDA of $4.9 million. TPB expects the transaction to be immediately accretive. As part of the acquisition, TPB will consolidate underperforming overlapping channels that will lower remaining TPB 2018 net sales by $5.0 million.

TPB President and Chief Executive Officer, Larry Wexler, commented, “IVG has played an important role in shaping the vaping industry since its inception through its commitment to the consumer experience with a world class B2C infrastructure. This greatly expands our capabilities across all of our selling channels. The scale created via the combination of IVG and TPB family of vapor businesses will provide significant synergies in logistics, marketing and sourcing, which ultimately will benefit our consumers.”

“Turning Point Brands has been a pioneer in the burgeoning vapor industry,” said Nick Molina, Co-Founder of IVG. “I am excited TPB leadership recognized the growth potential for IVG. This acquisition will continue to enhance the quality of products and buying experience available to consumers and our franchisees.” Nick Molina will join the TPB management team as President of IVG.

“TPB’s increased commitment to the vapor space underlines our company’s dedication to ensuring that this industry succeeds and continues to assist the adult consumers and small businesses who depend on using and selling vapor products,” said Graham Purdy, President, New Ventures. “By bringing IVG into the TPB family, we are leveraging our industry-leading brand and regulatory infrastructure to build the preeminent vertically-integrated smoking alternative platform.”

Frost Brown Todd acted as legal counsel to TPB and Moss Adams acted as financial and tax advisor.