Vapor Corp., with its brands Emagine Vapor, Krave, VaporX, Hooka Stix, Alternacig, and Fifty-One, will be merging with Vaporin Inc., which distributes and markets vaporizers, tanks, mods, and e-liquid products, reports the convenience-store news source CSP Daily News. The deal will be concluded in the first half of 2015 in Miami and Dania Beach, Florida, and the continuing company will be called simply Vapor.
The closing is conditional upon several conditions, and will be a 50/50 venture. The merged company will build a line of retail stores called Emagine. On the merger's effective date, outstanding Vaporin shares will be converted into a “right to receive” a quantity of Vapor common stock such that holders will possess 45% of the merged total immediately after the consummation.
Vapor is planning to obtain agreements and commitments for some 3rd-party financing transactions, including $43.5 million in equity financing to be placed into escrow. The only condition is the closing of the merger with Vaporin. Beyond this commitment, Vapor must receive assurances from other 3rd-parties for financing up to $25 million.
The timing is such that the closing conditions must be met by May 14, 2015, or either party may terminate the deal. The possibility remains that under certain circumstances, one of the parties must pay a termination fee to the other if the deal is not concluded. Vapor Corp. and Vaporin executed a binding term sheet on November 6, 2014.
Another 50/50 joint venture is in the offing between Vapor/Vaporin and Emagine the Vape Store LLC, a brand new Delaware company. The initial mangaer of Emagine will be Vaporin, and the purpose will be “to obtain and build out retail store” for selling Vapor/Vaporin products under the imprimatur of Emagine Vapor and The Vape Store, Inc.
Jeff Holman, Chairman, President, and CEO of Vapor says, "I am extremely excited to advance towards the completion of our strategic merger with Vaporin. In addition to Vaporin offering a high-quality, complimentary product line to Vapor, I am excited at the prospect of leveraging their retail knowledge and having their team spearhead our efforts to expand the footprint of our emagine vapor retail locations."
Vaporin's CEO Greg Brauser said, "As a first-mover to satisfy shifting consumer demand toward vaporizers, Vapor Corp. remains at the forefront of this burgeoning industry. We are excited to join forces with Vapor in order to leverage their share of the e-cig, vaporizer and accessories market in building a unique brick-and-mortar retail presence for our combined product lines."