Lorillard (LO.DL) is placing more chips on the market for electronic cigarettes this week.
In its second big buy in as many years, Lorillard announced Tuesday that it agreed to buy U.K. e-cigarette maker SKYCIG for $48.6 million, plus up to $48.6 million more that may be paid in 2016 "based on the achievement of certain financial performance benchmarks." Lorillard already owns the leading U.S. e-cigarette brand, Blue Cigs, which it bought for $135 million last year. Now, the company says it's positioned with a "significant European presence in the e-cigarette market" as well.
Lorillard says its mission is "to be first and best in the electronic cigarette category." In a simultaneous statement, SKYCIG co-founder Tom Rolfe noted that his company is "the best and the most widely available e-cigarette brand in the U.K." SKYCIG will continue to operate independently and maintain a separate brand from Lorillard, which, in addition to its new e-cig ventures, is the third largest U.S. cigarette company.
E-cigarettes are gaining popularity as an alternative to traditional "analog" cigarettes among smokers, and among people trying to quit smoking as well. Battery-operated, e-cigs often look like real cigarettes, but they operate by heating a nicotine solution (sometimes referred to as "smoke juice") into vapor form, at which point it can be inhaled and exhaled much like tobacco smoke -- but with fewer harmful chemicals.
At present, Lorillard is the only major tobacco company with a significant presence in the e-cig market.
