Streaming, thoughts on today's acquisition? Here is the PR.
22nd Century Group, Inc. (OTCQB: XXII) announced that the company and NASCO Products, LLC entered into a definitive and binding agreement for 22nd Century Group to purchase NASCO Products. NASCO Products, a federally licensed tobacco product manufacturer, is also a participating member of the Tobacco Master Settlement Agreement known as the MSA, an agreement among 46 U.S. states and the tobacco industry administered by the National Association of Attorneys General (NAAG).
The purchase price for the NASCO acquisition is $1 million payable in a combination of cash and equity. The purchase agreement also contemplates that 22nd Century will enter into a management agreement and a sales agreement at closing with an affiliate of NASCO Products. In addition, 22nd Century will purchase cigarette manufacturing machinery for approximately $2 million.
Upon closing, which will take place immediately following NAAG’s consent of the acquisition, NASCO Products, LLC will become a wholly-owned manufacturing subsidiary of 22nd Century Group. Current president of NASCO Products, Ralph Angiuoli, will be part of the management team of the new 22nd Century Group subsidiary. Mr. Angiuoli, former President and CEO of RJ Reynolds Tobacco Company, is a 30-year veteran of the industry.
Barry Saintsing and Ralph Angiuoli Jr., owners of an affiliate of NASCO Products, will also join the 22nd Century management team. Mr. Saintsing was formerly with RJ Reynolds Tobacco Company for 34 years and retired as Master Product Developer. Mr. Angiuoli, Jr. was also formerly with RJ Reynolds as a sales and marketing representative. Joseph Pandolfino, CEO of 22nd Century Group, explained, “Having the NASCO Products team aboard will be of tremendous benefit to 22nd Century Group by facilitating the production and distribution of our products in the United States.”
Goodrich Tobacco Company, the distribution arm of 22nd Century Group, has thus far utilized contract manufacturers that are not members of the MSA to produce the company’s cigarette brands. Henry Sicignano, President of Goodrich Tobacco, explained, “We intentionally have delayed expansion of the marketing and distribution of our brands in the United States since the more product we sold, the more difficult and expensive it would be to become a participating manufacturer of the MSA. 22nd Century Group owning NASCO Products resolves this issue.” Upon NAAG’s consent of the acquisition, 22nd Century will move forward with widespread distribution and sales of the company’s brands throughout the United States.
Mr. Sicignano added, “We look forward to obtaining consent of NAAG for the NASCO Products acquisition so that our super-premium brands, RED SUN and MAGIC can be sold under the MSA.”
22nd Century also produces a research cigarette, SPECTRUM, for the U.S. government that is distributed under the direction of NIDA, a component of the U.S. National Institutes of Health. The SPECTRUM product line includes a series of cigarette styles that have a similar “tar” yield but varying nicotine yields over a 50-fold range – from very low to high – due to different levels of nicotine in the tobacco. No other company in the world is capable of producing cigarettes with such a wide range of nicotine content. SPECTRUM is not a commercial cigarette but is strictly for research purposes. 22nd Century has delivered approximately 12 million SPECTRUM cigarettes and has recently received a purchase order for another 5.5 million SPECTRUM cigarettes which equates to 275,000 packs of 20.