Worldwide premium cigar business Imperial Brands has agreed the sale of its worldwide premium cigar businesses (“Premium Cigars”) to investment consortia of individual investors in two distinct transactions for a total consideration of EUR 1,225 million (£1,074 million), which represents a multiple of 11.8x FY19 EBITDA on a standalone basis.
After adjusting for tax and other costs, the disposals are expected to realize net cash proceeds of around EUR 1,094 million (GBP 958 million). The proceeds will be used for debt reduction. The sale will take place in two transactions documented under two sale agreements: one for the USA business (“Premium Cigar USA”); and another for the Rest of the World business (“Premium Cigar RoW”).
In respect of the transactions:
– Gemstone Investment Holding Ltd will acquire Premium Cigar USA for a total consideration of EUR 185 million (GBP 162 million). This transaction is subject to the fulfillment of certain conditions, including customary antitrust and other regulatory clearances.
– Allied Cigar Corporation, S.L will acquire Premium Cigar RoW for a total consideration of EUR 1,040 million (GBP 912 million). This transaction is subject to the fulfillment of certain conditions, including customary antitrust and other regulatory clearances.
– The transactions are expected to close in the third quarter of calendar year 2020. The Premium Cigar RoW transaction includes the sale of the Dominican Republic handmade premium cigar factory which is expected to close in 2021.
– Of the Premium Cigar RoW transaction consideration, EUR 88 million (GBP 77 million) will be deferred for 12 months from close and EUR 69 million (GBP 61 million) will be deferred and contingent upon transfer of the Dominican Republic factory.
AZ Capital
Advised in the sale of
Imperial Brands (Premium Cigar Business)
to