Republic Tobacco Drumming Up Sale?
Published in CSP Daily News
Could sell for more than $2 billion, sources say
GLENVIEW, Ill. -- Republic Tobacco, a privately held company that makes the Drum brand of loose tobacco in the United States, is seeking a buyer and could fetch more than $2 billion in a potential sale, people familiar with the matter told Reuters in an exclusive report.
The Glenview, Ill.-based maker of tobacco and rolling papers has attracted interest mostly from private-equity firms, said the three people, who declined to be identified because the process is not public.
Republic, which could be worth as much as $2.3 billion according to one of the people, is being advised by Credit Suisse Group on the process, they told the news agency.
Republic and Credit Suisse did not have an immediate comment, said Reuters.
The auction, which is in the second round according to the sources, comes at a time when financing for leveraged buyouts is readily available, the report said.
Republic's major product lines include cigarette tobacco, cigarette papers, filtered tubes, accessories, pipe tobacco and cigars. Other brands Republic owns include Top tobacco and Job rolling papers.
Republic is owned by D.R.L. Enterprises, a holding company founded in 1969 by Chicago entrepreneur Donald Levin. D.R.L has businesses in aircraft, medical equipment, machinery leasing, film distribution and licensed sports product manufacturing, said the report.
Tobacco companies are often seen as defensive plays because they are consumer staples, but cigarette smoking is in decline in many developed markets.
The market for "roll-your-own" (RYO) tobacco was worth about $798.8 million in the United States last year, and $18.48 billion worldwide, according to the report, citing Euromonitor International.