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Victory (ECIG) - Mansour deal bodes well

The gargantuan deals of the tobacco merchants were not the only economic events of the week in the nicotine products sphere. A deal involving $60 million may have more long-term impact on the future of vaping. The rising Michigan company now calling itself Electronic Cigarettes International Group (ECIG, formerly Victory E-cigs) has been gathering strength for some time now, acquiring other strong independent e-cig concerns.

This week the Grand Rapids, Michigan firm was promised 60 big ones for a distribution deal with the Mansour Group (through its investment arm, Man FinCo, Ltd.), which has a vast network of clients throughout the Middle East and Africa.

The Michiganders have been in the news in other ways recently. So far this year they have merged with FIN Brands, making them one of the largest independent vaping supplies companies in the US, and presenting significant challenge not only to other independents but to Big Tobacco as well. They also acquired British e-cig brand Vapestick and moved forcefully into European distribution channels.

The alliance with Mansour will open up markets beyond Europe. The company is no mere cigarette hawker. Mansour manages businesses in the automotive industry and heavy equipment. As a distributor and retailer, Mansour deals with food and consumer goods as well as tobacco products, and they also manage suppliers of services. The company enjoys strong relationships with General Motors, McDonald's, Caterpillar, and others. Mansour's original home base has been Alexandria, Egypt, where the company's supermarket business, Metro, dominates local and international grocery chain areas.

This week's deal will transfer $20 million upfront to ECIG (aka Victory) in the form of capital shares, with a promise of $40 million more to follow. "We are convinced that electronic cigarettes will be a very significant business, and believe that ECIG will emerge as one of the global leaders," says Mohamed Mansour, the head of the company that bears his name.

“We are very pleased to gain [Mansour's] endorsement of our strategy, their financial support to help execute it and their alignment with our team,” said Brent Willis, whose background before becoming Victory's CEO includes executive positions at InBev (Anheuser-Busch and other beer brands internationally), Coca-Cola, and Kraft Foods.

This week has seen some significant partner changes on the corporate dance floor of the vaping supplies market. What will it mean for vapers on the ground?

If you still vape rechargeable cigalikes, and don't like to buy them from Big Tobacco, your prospects have improved. The strength of ECIG (Victory/FIN) enhances the position of US-based independents, and makes it increasingly unlikely that Big Tobacco will succeed in taking over the industry, especially with Blu corporate management moving overseas. Meanwhile, the voices of tobacco spin doctors touting the e-cig market as a downward slide may bode well for vapor-tank systems. That burgeoning market has been comparatively quiet this week, which is probably all to the good.