The oldest mail order cigar company in the USA has changed hands for a bumper $62 million.
Scandinavian Tobacco Group has taken the reins in a deal that is expected to go through by March. Thompson Cigars has $100 million sales a year, but the profit margin is low and the company is retruning single digits right now.
Now, Scandinavian Tobacco Group hopes the economies of scale will help it slash the costs and boost the profits.
The company has its HQ in Denmark, but has a strong US presence and owns distributor and online vendor Cigars International. It already has a call center in Tampa, so we can expect Thompson to cull its staff in the months ahead.
Niels Frederiksen, CEO of Scandinavian Tobacco Group, said: “Our existing U.S. online retailer, Cigars International, will in combination with Thompson be able to deliver an unmatched range of premium cigars at the highest level of service to the U.S. consumers. At the same time, we foresee significant cost synergies to the benefit of our customers and shareholders.”
Thompson Cigar was founded in 1915 and sold on to Robert Franzblau in 1960. It has 600,000 active customers and the website gets 167,800 visitors a month.
It’s the second major acquisition in the last few days as Quality Importers has bought XIKAR. We have suggested that there will be a consolidation in the cigar supply chain, from the farms that grow the tobacco right through to the online stores that ship to your door.
It’s going to have an impact on the industry, but only time will tell how it actually plays out.
For now, order from Thompson as normal here: