On March 6, 2023, Altria Group confirmed its intention to purchase e-cigarette maker NJOY for $2.75 billion cash. Altria’s purchase comes five years after the Marlboro maker purchased a 35% stake in Juul for $12.8 billion, a company with significant regulatory and legal challenges and uncertainties.
With the purchase of NJOY, Altria gained the intellectual property rights behind the first and only FDA-approved electronic cigarette and is now a significant competitor in the saturated e-vapor industry.
LEGAL BACKGROUND
In 2010, Steve Boatwright led the legal team that facilitated the successful takeover of NJOY Holdings Inc, the original electronic cigarette maker and the only one to have earned FDA approval.
Patent attorney and former hedge fund manager Craig Weiss, the new CEO of NJOY, and his brother Mark Weiss, the founder of NJOY, acquired NJOY through a hostile takeover and quickly brought in a team of experts from the tobacco industry, scientists, doctors, and former Surgeon General Dr. Richard H. Carmona to serve on its board.
As lead counsel for Craig and Mark Weiss, Steve handled the entire acquisition deal, including structuring the terms of the acquisition and related corporate legal issues associated with conforming with laws related to proxies and shareholder notes.
Founded in 2007 in Scottsdale, Arizona, NJOY pioneered the e-cigarette industry with 20 issued patents and 60 nonprovisional patent applications. NJOY’s battery-powered devices, marketed as an alternative to real tobacco cigarettes, deliver nicotine and/or flavoring through a liquid solution and atomizer to simulate tobacco cigarettes. Although not marketed as a smoking cessation device, many users have reported using NJOY for that purpose.
By 2014, NJOY was valued at $1 billion after a private round of funding raised over $70 million.
Click here to read the Wall Street Journal’s coverage of this deal.