JT to Acquire Fine-cut Company Gryson

Source from:  Tobacco Reporter 05/25/2012

May 24, 2012-The JT Group has agreed to acquire all outstanding shares of the family-owned fine-cut manufacturer, Gryson NV, and its related group companies for 475 million. The agreement has been entered into with GT&Co BVBA, which directly controls Gryson. The acquisition is expected to be completed this year after regulatory clearances are obtained. In announcing the agreement, Japan Tobacco Inc (JT) said Gryson, headquartered in Houthulst and with a production facility in Wervik, Belgium, had established an important presence in the roll-your-own and make-your-own markets of several EU countries, in particular France, Belgium, Luxembourg, Spain and Portugal, as well as in a number of small but promising export [non-EU] markets. ‘The cornerstone of Gryson's presence is its strong and diverse brand portfolio comprising the key brands Fleur du Pays, Orlando and Domingo,' JT said in a note posted on its website. ‘Fleur du Pays, a heritage French brand, leads the RYO/MYO market in France holding a share of 11 per cent on sales of approximately 900 tons in 2011. ‘Gryson's total sales volume is approximately 3,900 tons in 2011, which is an equivalent of 5.2 billion cigarettes. ‘The transaction to acquire Gryson's and its related companies' shares is valued at 475 million on a debt-free and cash-free basis, which values the transaction at 12.3 times the acquired companies' underlying earnings before interest, tax, depreciation and amortization of 38.7 million forecasted for 2012. ‘It is envisaged that the acquisition will be funded by a combination of the JT Group's existing funds and loan facilities. ‘The acquisition is expected to have a minor effect on the Group's consolidated account for the fiscal year ending March 2013.' Meanwhile, in a separate note posted on Japan Tobacco International's (JTI) website, Eddy Pirard, regional president, Western Europe for JTI, was quoted as saying: "Our investment in Gryson presents Japan Tobacco International with an attractive opportunity to enhance its position in the growing and profitable RYO/MYO market in Europe, anchored on this well-managed, innovative and successful company. "Today's announcement reflects JTI's strategy to acquire and further build outstanding brands across all tobacco product categories addressing today's adult consumers' needs, and to capitalize on Gryson's unique expertise." Guido Vandermarliere, chairman of Gryson, said his company was confident that JTI was the best match to promise a bright future for Gryson, its brands and, even more importantly, its people. "Like Gryson, JTI has in its DNA the core values of responsibility, ethics and utmost commitment to quality," he added. "They intend to maintain and further expand the production facilities in Wervik, and I am confident that our valuable assets and employees will be well nurtured under JTI's leadership."Enditem