Imperial Brands has on Friday announced the acquisition of a range of nicotine pouches from TJP Labs in order to facilitate its entry into the US modern oral market.
The transaction – for an initial consideration of £65 million, with an additional deferred sum based on sales volumes over five years – will enable ITG Brands, Imperial’s US operation, to offer American consumers a diverse range of 14 product variants in a pouch.
While Imperial Brands markets nicotine pouches in select European markets under the Zone X and Skruf brands, the acquisition will enable ITG Brands’ first offering in the modern oral nicotine market in the US.
ITG Brands will relaunch the range next year under a new brand, with TJP Labs, a Canada-based manufacturer, continuing to manufacture the nicotine pouches under contract.
“Today’s transaction is aligned to our focused, challenger approach in next generation products and to our disciplined capital allocation framework,” Stefan Bomhard, group chief executive of Imperial Brands, said.
“While it will take time to build our presence in this category, the proposition we are acquiring is clearly differentiated within the US market and has tested strongly with consumers.”
Kim Reed, president and chief executive of ITG Brands, added: “This is an opportunity to expand our next generation product offerings in the US and to be able to offer our legal adult consumers a wider range of product options. We look forward to a long and successful partnership with TJP Labs.”
David Richmond-Peck, TJP Labs chief executive, said: “Imperial has extensive brand development, marketing and sales execution capabilities in the US and a long global track record of operating responsibly. We look forward to a strong and ongoing partnership.
“This transaction supports TJP Labs’ commitment to developing and producing products to promote global harm reduction, consumer choice and flexibility.”