Imperial Brands PLC today (May 27) announced the acquisition of Black Buffalo, a differentiated modern oral business, broadening and strengthening its portfolio in the evolving United States oral nicotine category.
Established in 2015, Black Buffalo’s tobacco alternative long cut and pouch products are designed specifically for legal adult consumers of traditional moist smokeless tobacco (MST).
They closely replicate the taste, ritual, and branding of traditional products to emulate the experience of MST without tobacco leaf or stem.
Uniquely designed using a proprietary farm-to-can process developed through years of research and development, Black Buffalo is manufactured in North Carolina from US-grown barn-cured leafy greens, with pharmaceutical-grade nicotine and food-grade flavour added.
Black Buffalo offers a differentiated experience and appeals to different consumers, compared to zone, Imperial’s existing US range of flavoured nicotine pouches.
Combining Black Buffalo’s clearly defined brand and differentiated products with Imperial’s commercial infrastructure and sales execution capabilities will enable greater choice for legal adult consumers seeking alternative non-combustible oral products as part of broader tobacco harm reduction efforts, while supporting accelerated revenue growth.
Lukas Paravicini, Chief Executive Officer of Imperial Brands said: “This acquisition reflects our disciplined and focused approach to building a stronger next generation product portfolio in markets where we see attractive long-term growth opportunities.
"Black Buffalo is a strong, challenger brand with a highly differentiated proposition and complements our broader growth strategy.”
Kim Reed, President and Chief Executive Officer, ITG Brands, US subsidiary of Imperial Brands PLC, said: “The oral category continues to evolve rapidly, and this acquisition further strengthens our ability to compete and grow across differentiated segments. Black Buffalo broadens our oral portfolio beyond nicotine pouch offerings and expands the range of products we can offer legal adult consumers.
“We look forward to deploying our best-in-class sales execution, retail relationships and nationwide commercial infrastructure to reach new Black Buffalo consumers and accelerate long-term growth.”
Mark Hanson, Co-founder and President of Black Buffalo, said: “Black Buffalo was built on innovation, deep consumer insights and a commitment to differentiated alternatives for adult consumers. We are excited about the opportunity with our new colleagues to combine our brand and product expertise with their scale, resources and commercial capabilities.”
As part of the transaction, the Black Buffalo team will be joining the Imperial Brands team.
The transaction – for an initial consideration of $150 million with an additional deferred sum based on performance over three years and other criteria – is consistent with Imperial’s capital allocation policy to invest in the business strategy through bolt-on transactions. The company continues to be committed to an ongoing multi-year share buyback program.
Black Buffalo products are intended only for legal adult consumers. Imperial Brands remains committed to responsible marketing practices and youth access prevention across their product portfolios.
Effective immediately, Black Buffalo will become part of the Imperial Brands portfolio.
Imperial Brands PLC was advised on this transaction by Morgan Stanley & Co. International PLC, KPMG LLP and White & Case LLP. Black Buffalo was advised on this transaction by Goldman Sachs & Co LLC and Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Imperial Brands PLC, a FTSE 100 company headquartered in the UK, is a global consumer goods organisation and the fourth largest international tobacco company.
Our core tobacco business is built around a comprehensive portfolio of local and international cigarette brands and other tobacco products and smoking accessories available in 120 markets worldwide.
Aligned with our purpose to forge a path to a healthier future for moments of relaxation and pleasure, we are also committed to building a sustainable next generation product (NGP) business, offering smokers a targeted range of potentially less harmful alternatives to traditional tobacco products.
About ITG Brands