News Release 12/19/2013
News Release 12/19/2013
VICTORY ELECTRONIC CIGARETTES CORPORATION SIGNS DEFINITIVE AGREEMENT TO ACQUIRE VAPESTICK, ONE OF EUROPE’S LEADING ECIG COMPANIES
SPRING LAKE, MICHIGAN, December 19, 2013 – Victory Electronic Cigarettes Corporation (OTCQB:ECIG) (“Victory” or “the Company”) an emerging leader in the electronic cigarette industry, today announced the signing of a definitive agreement to acquire VAPESTICK®, for $70 million in a combination of cash and stock. This major acquisition, of a leading European brand of Electronic Cigarettes, represents a significant step in Victory’s ongoing global market consolidation strategy. The VAPESTICK® brand is well known for its superior quality, distinctive styling and iconic brand imagery. VAPESTICK® has built an excellent distribution platform on which to accelerate the expansion of both the VAPESTICK® and Victory brands throughout Western, Central, and Eastern Europe.
The VAPESTICK® brand has garnered distribution in major Western European Markets and major UK retailers including Tesco, WH Smith, Costco, and Harrods of London. VAPESTICK® was recently ranked number one in consistency and product delivery of all leading UK brands in an independent study initiated by the UK’s Department of Health.
Brent Willis, Chairman and Chief Executive Officer of Victory, commented, “We are extremely fortunate to have partnered with such a powerful leadership team that Mr. Clapper has developed, and to be integrating such a strong and well run business as VAPESTICK® into Victory. Their European distribution platform will be an excellent springboard for further growth and consolidation of the industry which Victory expects to lead worldwide.”
Mr. Clapper noted, “Everyone at VAPESTICK® is delighted to be joining Victory, with its world-class management team, unique financial structure and focused plans to consolidate the global Electronic Cigarette Industry. The ECIG category is highly disruptive and growing fast at the expense of the $720 billion dollar tobacco category. In taking this step with Victory, we are ensuring that we have first mover advantage and the ability to capitalize on the vast number of opportunities now presenting themselves.
Paul Herman, Chief Executive Officer of Bluebox Corporate Finance that advised on the transaction and is joining the Board of Victory along with Mr. Clapper, commented: “The combination of Victory and VAPESTICK® provides substantial value for the shareholders of both companies. The acquisition significantly expands management bandwidth and enables accelerated growth of both operations. The entity will continue to look to incorporate more distributor and brand partners globally as it leads consolidation in this highly attractive category.”
Victory Electronic Cigarettes is dedicated to providing a cleaner and healthier alternative to smoking for all and intends to empower smokers to regain their freedom. Victory is one of the leading companies in this rapidly emerging and fast-growing market. The Company began online sales in 2012 and expanded to retail early in 2013. Victory offers consumers a full product portfolio that incorporates the highest quality and latest technology, and has been rated as superior in real tobacco taste amongst major brands. Recently public, Victory's experienced management team is positioned to leverage its differentiated brand and low-cost infrastructure to accelerate growth and drive significant value for its shareholders. More information on the Company can be found on Victory’s website, www.victoryecigs.com.
VAPESTICK® is one of Europe’s leading brands of premium Electronic Cigarettes, founded in 2010 by co-founders Michael Clapper and Michiel Carmel. With its distinctive black and chrome style designs and signature blue light tips, VAPESTICK® has grown to become one of the most recognized brands in the market and currently sells its products both online www.victoryecigs.com. and through thousands of retail outlets across the UK and Europe, including Tesco, Costco, Harrods and WHSmith. The business is a founding board member of ECITA (European Electronic Cigarette Industry Trade Association).
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Safe Harbor Disclosure
This press release contains forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial condition and achievements of Victory, including statements regarding Victory’s expectation to see continued growth. The forward-looking statements are based on the assumption that operating performance and results will continue to materialize consistent with recent trends. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate. Forward-looking statements, specifically those concerning future performance are subject to certain risks and uncertainties, and actual results may differ materially. These risks and uncertainties include: Victory’s reliance on additional financing, as Victory has not achieve profitability; risks associated with Victory’s products, including that they may pose a health risk; governmental regulations may impact Victory’s business; the market or consumers may not accept Victory’s products; Victory relies on a single class of products; existing or pending patents may affect Victory’s business; and other factors disclosed in the Company's filings with the Securities and Exchange Commission. Unless required by applicable law, Victory undertakes no obligation to update or revise any forward-looking statements.