The Manchester-based company behind the Intellicig brand of electronic cigarette has been acquired by British American Tobacco following a deal that gives its owners a giant “lucky strike”.
CN Creative is estimated to have been purchased for up to £50m, according to sources, close to the deal.
The tobacco giant, whose cigarette key brands include Lucky Strike, Kent, Dunhill and Pall Mall, declared the takeover was a natural course of its approach to risk reduction.
Kingsley Wheaton, director of corporate affairs at BAT, stated: “Our key business is, and would remain, tobacco products, yet we have always indicated that our objective is to offer those adult tobacco consumers who are interested in less harmful alternatives to cigarettes a wide range of lower-risk products that will satisfy their different needs.
“And we consider that the innovative technologies in the e-cigarettes segment that CN Creative has been creating within the last several years will help us get closer to reaching that objective.”
CN Creative owners Chris Lord and David Newns declared: “This is an amazing chance that helps us to enhance the development process and successful introduction of our innovative and landmark electronic cigarette technologies.”
The two established the business in September 2008 and the company today employs 54 people.
Intellicig is selling by about 5,000 retail shops and independent drug stores in 26 countries.
The nationwide market for electronic cigarettes accounts for £30m yearly across the UK and more than 500 million dollars throughout the United States. Electronic cigarettes are devices which mimic smoking by emitting a vapor, frequently containing liquid nicotine.
Besides Intellicig, the company is also in the process of developing its Nicadex nicotine product in order to comply with expected regulatory standards in the United Kingdom. Nicadex is a hand-held, battery-operated device which produces purified nicotine solution to the user by means of vaporization.
CN Creative delivered revenues of slightly over £2m in the fiscal year ending in September and in addition, the company received a £2m investment stimulus from Advent Life Sciences in exchange for a 50 percent stake earlier this year.
The deal was also boosted by the coming of Tim Byrne, former chief executive of Airtours, as its financial director.
Byrne declared last week that it was a usual business for CN Creative, yet noted that the acquisition by BAT would be ‘game-changing event’ for the group.
Legal councilors who were engaged in concluding the deal with British American Tobacco included a team of attorneys from Addleshaw Goddard law company, headed by Darren Harris and Neal Shepherd.