Shares of Louisville-based tobacco company spike on acquisition

Shares of Louisville-based Turning Point Brands spiked nearly 11 percent Thursday after the tobacco products company said that it was buying an e-cigarette distributor.

TPB shares jumped as high as $38.38, up 10.9 percent, before retreating slightly. Shares traded at $37.36 in the early afternoon, still up more than 8 percent for the day.

TPB said in a news release Thursday morning that it had acquired International Vapor Group for $24 million, including $15 million in cash, $5 million in TPB shares and a $4 million 18-month promissory note. The acquisition price could rise to $28.5 million if certain performance metrics are met.

IVG generated revenue of $47.7 million and operating profit of $4.9 million in the year ended June 30, according to a news release. TPB said that as a result of the acquisition, it will “consolidate underperforming overlapping channels,” which is expected to lower 2018 revenue for the remainder of the year by $5 million.

TPB sells tobacco-related products including chewing tobacco, e-cigarette liquids, cigars and pipe tobacco under brands including Stoker’s, Zig-Zag and VaporBeast.

IVG, based in Miami Lakes, Fla., sells e-cigarettes and related products, including brands South Beach Smoke, VaporFi and Motley Brew, online and in retail stores.

TPB President and CEO Larry Wexler said in the release that the acquisition “greatly expands our capabilities across all of our selling channels … (and) will provide significant synergies in logistics, marketing and sourcing, which ultimately will benefit our consumers.”

TPB could not be reached immediately to talk about how the acquisition would affect employment.

Last month, the company said that it had recorded net sales of $81.1 million, up 12.5 percent from a year earlier. Net income, at $9.3 million, was up 25.3 percent.

In April, Turning Point Brands had acquired B2b e-commerce marketing and distribution platform VaporSupply.

For the year, TPB shares are up nearly 80 percent.