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Why is JUUL seeking a cash infusion?, News has emerged that the vaping industry’s biggest player in the U.S., seeks additional cash from global sources.
Do the rich get richer – again?
With a near-term valuation goal of $45 billion and backed by minority partner Altria Group, one of the world’s top tobacco producers, JUUL is positioning itself to allow overseas investors an opportunity to examine its financial books for a possible cash infusion of about $10 billion, according to a nypost.com story.
The sovereign funds would aid JUUL’s push to gain a greater market share outside of the U.S. The San Francisco-based company owns more than 70 percent of the domestic vaping market and could look to financiers such as Singapore-based GIC to fuel the expansion, nypost.com reported.
“Europe and Asia will drive significant growth,” a JUUL insider told nypost.com. “They are only reaching out to sovereign funds and big-money investors.”
The source, who serves as a JUUL advisor, said talks remain in the initial stages but are progressing. The source added the company also seeks the cash to create a big payday for current investors.
JUUL declined an interview request from nypost.com.
Altria, the producers of the iconic Marlboro brand, invested $12.8 billion for a 35-percent stake in JUUL last December. Valued at $38 billion following the deal, JUUL anticipates an international infusion will increase its valuation at least $7 billion.
While some market analysts do not believe JUUL will complete a financing round, others point to all of the preliminary work that has already been accomplished. Why go this far, the sources told nypost.com, if it’s not JUUL’s endgame?
JUUL, which could announce a new adviser this summer, has recently been connected with JPMorgan, which is helping to organize financing alternatives.
“That’s classic VC fundraising,” a source told nypost.com. “You’ll try to raise money and take it if it comes at the right valuation.”
JUUL seeking a cash infusion would back up the old saying: the rich do get richer.
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