NJoy’s Ace device was the first e-cigarette authorized by FDA that is equipped with ceramic coils and manufactured by FEELM.
Altria Group is close to reaching an agreement to acquire e-cigarette company Njoy for at least US$2.75 billion, the Financial Times reported.
The deal would be Altria’s second bet on the vape industry, five years after spending US$12.8 billion to buy 35% of Juul, the US e-cigarette market leader at the time. Altria recently lowered its assessment of that investment to US$250 million after a number of governmental and judicial setbacks for Juul.
Last year, Njoy obtained US Food and Drug Administration (FDA) approval to keep selling its Ace pod-based, tobacco-flavored vape brand and its Njoy Daily disposable vape product as part of FDA's evaluation of 6.7 million vaping products. In contrast, other e-cigarette devices have had difficulty getting the agency’s approval.
According to a person familiar with the matter, if more regulatory milestones are met, including FDA's approval of Njoy's menthol-flavored goods, current shareholders could receive a further US$500 million payout as part of the agreement.
The potential deal would be a significant turning point for US-based Njoy, which emerged from bankruptcy protection in 2017.
One of NJoy's largest investors is Mudrick Capital Management, which paid around US$40 million for a controlling stake in the business in 2017. Mudrick has since sold down some of its stake.
Homewood Capital, a private equity company led by Douglas Teitelbaum, who until last year served as Njoy's chair, is another investor.
According to a Cowen analysis of NielsenIQ data, Juul accounted for 26.5% of US e-cigarette sales in the three months to mid-February this year, down from 34.3% a year earlier. Njoy accounted for 2.7% of the market.