JAPAN TOB INC (OTCMKTS:JAPAY) corrected the large gain made in the previous day as it finished the last trading session with a minor loss of 1.90% only, helped by a nice recovery from the day low. The volume of the day at 186,000 was much higher than the daily average of 89,000 but that could be taken as a normal result of the battle between the bulls and the bears. The chart attached clearly shows a breakout from an Inverse Head & Shoulders pattern and that may push the stock much higher.
To make the best use of the prevailing market conditions, JAPAN TOB INC (OTCMKTS:JAPAY) has decided to sign an agreement with Reynolds American Inc. group to acquire Natural American Spirit business. As per the reports, JT will acquire NAS business located outside the US and not inside the US.
The transaction is likely to get completed by the first quarter of the next year.
Purpose of Acquisition
The Natural American Spirit brand has been the primary choice of customers in the US since the very first day it came into existence. Customers belonging to countries like Japan, Switzerland, Germany, Italy, the U.K. and Spain have loved the product offered by the Natural American Spirit business.
According to Mitsuomi Koizumi, CEO & President, Japan Tob Inc, Natural American Spirit has a strong national and international image. Acquisition of NAS will help the JT strengthen its market position and global presence. There is tough competition prevailing in the market, and acquisition of the Natural American Spirit will help the company survive through this tough period.
JT won’t force the Natural American Spirit to change the way it works to ensure it can use its expertise in an effective way.
Natural American Spirit’s Business Outside US
The net sales of the business to be transferred to JT is around JPY 17.6 billion , whereas the PBIT is JPY 2.1 billion. The business also makes room for total assets of JPY 14.9 billion and debts in 2014 of JPY 4.3 billion.
The tentative acquisition price is expected to remain around JPY 600 billion, and will be made in cash.
New Executive Appointment
Along with the acquisition of Natural American Spirit, JT also announced a couple of new executive appointments. Koji Shimayoshi has been appointed as the new Chief Human Resource Officer and Senior Vice President. From now on wards, Chito Sasaki will work as the SVP and Deputy Marketing and Sales Officer in Tobacco Business section.
