Post Wires
August 19, 2019
US e-cigarette maker Juul Labs Inc has raised $325 million in an equity and debt offering to speed up its global expansion as US lawmakers seek to crackdown on the vaping company, including in New York.
Juul — 35% owned by Marlboro maker Altria Group Inc — has been refocusing its efforts on growing outside the US as American regulators and lawmakers increase oversight of vaping products, which are wildly popular among teenagers.
In June, San Francisco became the first major US city to ban the sale of e-cigarettes. And last October, the Food and Drug Administration raided the company’s San Francisco headquarters after then-FDA Commissioner Scott Gottlieb said there was an “epidemic of youth e-cigarette use.”
Pressure on the company is ratcheting up in New York, too. On Tuesday, NYC Councilmember Mark Levine, parents and other anti-smoking advocates will join together in front of Juul’s offices in downtown Manhattan to protest the company as city legislators seek to outlaw flavored tobacco products, which they say hooks kids.
The company did not break out the ratio of equity and debt offered, but a source familiar with the matter told Reuters that Juul sold convertible debt in a bridge financing to bolster its balance sheet.
The company launched its products in South Korea, Philippines and Indonesia at around the same time the city of San Francisco, where Juul is headquartered, approved an ordinance to ban the sale and distribution of e-cigarettes until manufacturers get approval from the U.S. Food and Drug Administration.
The latest funding round comes a year after Juul, which launched its products in 2015, raised about $1.25 billion to fund its explosive growth. Last December, it received about $12.5 billion from Altria for a stake in the company. According to the CDC’s National Youth Tobacco Survey, e-cigarette use among high school students increased by 78 percent between 2017 and 2018. While the House Oversight and Reform committee in July said Juul has spent more than $200,000 and marketing to young people
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