Cigar Industry

Swisher International Acquiring Drew Estate

Oct 20, 2014 | By Gregory Mottola
Swisher International Acquiring Drew Estate

Tobacco giant Swisher International Inc. has agreed to acquire cigar manufacturer Drew Estate Inc., the maker of Liga Privada, ACID and many other cigars. Swisher, the mass-market giant best known for making Swisher Sweets and other machine-made cigars, will run Drew Estate as a wholly owned subsidiary, keeping the existing management team intact.

Terms of the deal, which is expected to close before year's end, have not been disclosed.

As part of the deal, Swisher will acquire all of the Drew Estate brands, as well as the Gran Fabrica Drew Estate factory, the largest cigar factory in Nicaragua at 114,000 square feet. It produces 25 million handmade cigars annually (95,000 per day) and has a $20 million inventory of tobacco. Drew Estate's brand portfolio ranges from infused cigars such as ACID (the largest seller for the company in terms of volume), and multiple lines of premium cigars such as Liga Privada, Undercrown, My Uzi Weighs a Ton and Herrera Esteli, the number eight cigar in Cigar Aficionado's Top 25 Best Cigars of 2013.

"The products produced by Drew Estate and its distribution partners Joya de Nicaragua, Royal Agio Cigars and Tsuge pipes are top-quality market leaders in their respective segments," Peter Ghiloni, president and CEO of Swisher International, said in an official press release. "The creativity, passion and innovation of Drew Estate employees and management are a perfect match for Swisher."

Based in Jacksonville, Florida, privately held Swisher International is the world's largest producer of machine-made, mass-market cigars, with its flagship product, Swisher Sweets, the largest-selling cigar brand in the world. The company has manufacturing facilities in West Virginia and the Dominican Republic, and sells its product in more than 80 countries.

Drew Estate was founded in New York City in 1996 by Jonathan Drew and Marvin Samel, both of whom are slated to remain with the company.

"We are eternally grateful to all of those who have helped build Drew Estate and look forward to advancing the Drew Estate legacy with a great partner," said Drew.

Drew Estate president Michael Cellucci noted that Drew Estate, which currently has headquarters in Miami, would benefit from the association with the much larger company. "After the transaction closes, we will continue to run our business as we have in the past and will be able to leverage the resources of Swisher to continue our growth with a renewed focus on our commitment to quality products and people—two of the core principles of the Drew Estate belief system."

This is a developing story. For more details on the acquisition, see tomorrow's Cigar Insider.

Drew Estate
"I guess for Drew and co., this is the best time to make a move like this. Being at the top of one's game, and in an uncertain future market, can make selling a wise move. Let's hope this industry consolidation does not ruin good small manufacturers down the road. Best of luck to Jonathan and the entire DE crew." —October 28, 2014 20:21 PM
"Fitting that the maker of the world famous grape flavored machine made cigar should pick up drew and his infused lines." —October 28, 2014 19:52 PM
"Astonishing! Swisher just recently began their hand-made division here and BAM! they acquire Drew Estates! I do wish all the best to company and hope that the consumer is the one who ultimately benefits from this extrordinary purchase! Smoke&Ash Cigar Club " —October 27, 2014 13:17 PM
"This is a great partnership. Drew Estate is a powerful, explosive brand-making machine and Swisher has the desire and ability to equip them with the resources to take the next step. I expect to see Drew Estate challenge the market with new expertly crafted non-infused cigars as well as Swisher taking ACID lines into the mass market." —October 21, 2014 12:52 PM
"While I imagine this is a move to protect the company in the face of impending FDA regulation, it seems a shame to lose yet another privately held brand to a big corporation. It seems that every time this happens (with the notable exception of Toraño, who seem to have simply gotten out altogether) there is a promise to keep the management team, but that rarely lasts. See El Credito and CAO for reference. I wish Jonathan, Marvin, Michael, Willie, and the rest of the team nothing but the best, and I hope this doesn't mean the end of the current era of a Drew Estate that really seems to be hitting its stride. " —October 21, 2014 06:40 AM
"Just yesterday I read on FB thar JD referred to the guy starting the "rumor" as a liar. If true, apologies should be issued to restore credibility. Congrats in the sale. " —October 20, 2014 19:09 PM

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