Japan Tobacco acquires electronic cigarette maker Zandera

TOKYO—

Japan Tobacco Inc.

2914 1.22%

on Wednesday announced that it has agreed to buy all of the outstanding shares of UK-based Zandera Ltd., which is best known for its brand of electronic cigarettes E-Lites.

The company, commonly known as JT, said the transaction will be funded from its existing cash and loan facilities and is expected to be completed in the second quarter of fiscal 2014 after regulatory clearance. JT did not disclose the purchase price.

“Our investment in Zandera provides the JT Group with an excellent entry point into the rapidly growing e-cigarette category,” Masamichi Terabatake, executive vice president and deputy general manager of Japan Tobacco International, said in a statement.

“With E-Lites’ well-established brand and product portfolio, we are able to offer adult consumers another significant extension of our growing line of emerging and innovative products such as tobacco vapor capsules (Ploom ), ”Added Mr. Terabatake.

Founded in 2009, Bromsgrove-based Zandera reported sales of £ 16million ($ 26.87million) in the fiscal year that ended in March.

The UK electronic cigarette market has grown rapidly in recent years. A study by the charity ASH published in April showed that adult e-cigarette use in Britain has tripled in the past two years, from around 700,000 users in 2012 to 2.1 million in 2014.

Write to Shawn Schroter at [email protected]

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