Drew and Swisher
It has been announced today that Drew Estate has been acquired by Swisher International. Details of the agreement have not been released. The rumors about the deal have swirled for many months, but today the news officially came out. This is a huge deal for both Swisher and Drew Estate.
According to the news release, the current Drew Estate management team will continue to operate as a subsidiary of Swisher. The release adds:
“We began under the Manhattan Bridge Overpass in Brooklyn, N.Y. with a laser focus on ‘The Rebirth of Cigars.’ Friends, retailers, and consumers connected with our passion and authenticity, supporting us at each stage of our growth. 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,” stated Jonathan Drew, Co- founder of Drew Estate, from Hopkinsville, Kentucky.
Drew Estate Co-founder Marvin Samel added, “This is a dream come true. From the moment we met the team at Swisher and began speaking of a possible acquisition, it was clear that, as a family business, they understood the culture we have created and completely supported our desire to keep our family at Drew Estate intact. The team we have built in Miami and Nicaragua represents the heart and soul of ‘The Rebirth of Cigars’ and will continue to drive that vision into the future. In fact, we’re just getting started.”
“As a global leader in the cigar and OTP categories, Swisher prides itself on developing, manufacturing, and distributing the most innovative and high quality tobacco products available. I see those same principles in Drew Estate,” said Peter Ghiloni, President and CEO of Swisher International. “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. The creativity, passion and innovation of Drew Estate employees and management are a perfect match for Swisher, and we look forward to welcoming them to our family.”
The deal is expected to close in the last quarter of 2014.
While it may look like an odd proposition, it really is not because there is history there. Alex Goldman is head of Swisher’s Royal Gold division of premium cigars and Goldman’s history with Jonathan Drew goes back to Jon’s first days in the business. The origins of Drew Estate are pretty well known. Jonathan and Marvin Samel had a cart at the World Trade Center in 1995. He bought some of his cigars from Mom’s Cigars in Manhattan and House of Oxford, which was owned by Alex’s father. Alex worked in the store while he was in high school and Jonathan helped out when he wasn’t working the cart. Said Jonathan, “He didn’t pay me I would just go there and work the phones and learn stuff. He started us with credit and that’s how we got the cart at the WTC. He liked Marvin and me. He gave us a lot of help to get started.” Marvin Samel came into the store one day and Alex realized the two had gone to the same youth group.
The Goldman’s also gave the fledgling company a few feet in their booth at the Retail Tobacco Dealers Convention in Cincinnati in 1996. Two years later, Drew had its own booth and was on its way.
It has never been easy for Drew Estate. That first year when they were officially at RTDA, they sold several hundred thousand dollars of cigars made for them by Perdomo. Shortly thereafter, hurricane Mitch hit and decimated production. Drew had the sales, but no cigars. By the end of 1998, Drew Estate was basically bankrupt but Jon and Marvin would not give up. Jonathan decided to move to Nicaragua to make his own cigars. Alex’s dad Mark, provided Drew with some help financially and lots of advice. The company had La Vieja Habana being made at Nick Perdomo’s factory during the day. At night, Jon worked non-stop building his own factory and coming up with ideas for cigars – new ideas. The result was ACID. It took off starting in the summer of 1999.
From those small beginnings, the company has grown from a handful of employees to about 1600. Its tiny factory is now the largest in Nicaragua, covering nearly 100,000 square with a second building opened earlier this year almost equal in size for tobacco processing.
When Royal Gold debuted with its lines, there was the Casino Gold made by Nestor Placensia, Kismet made by Nirka Reyes in the Dominican and Nirvana made by Drew Estate. The relationship continued between the Goldmans and Drew. There have been rumors over the years that Drew Estate was for sale, but all of those have been bogus. Bottom line is that pretty much every cigar company is for sale if the price is right.
With the uncertainty about the upcoming FDA regulations and their impact on “flavored” cigars, the Drew / Swisher merger makes a lot of sense. Swisher’s top product is the Swisher Sweets which the company began selling in the 50s and the company makes other flavored cigars. It is the world’s largest cigar company in terms of units sold (over a billion) and exports cigars to 90 countries around the world. Swisher has the financial muscle to fight back against the FDA, which would be good for Drew and the ACID and other flavored premium lines. Congratulations to both.