The partners in e-cigarette company Green Smoke Inc., CEO Robert Levitz, and co-founders Sam Kapuano and Ori Adivi, will reap almost the full proceeds from the sale of the company to Altria Group Inc. (NYSE:MO) for $110 million.
Levitz is an American lawyer who owns Green Smoke through a management company, Iroma, and Capuano is an observant American-Israeli. They have very diverse experience and all worked in retail or consumer products. Levitz had worked in the import/export of appliances and was later a manager at an investment bank, where he built strong ties with Israeli high tech. Kapuano, who invented the company's e-cigarette, has a background in website design and retail. Adivi is a lawyer who resides in the US.
Levitz owns 10% of Green Smoke, Kapuano owns 56%, and Adivi owns 33%.
After Kapuano spotted the potential of the e-cigarette market, Green Smoke went into business in 2008, importing and exporting e-cigarettes made by other companies. This is how the company gained its initial capital, and required no external financing, relying solely on its founders. When Levitz joined the company in 2010, he changed it from a trading firm into an R&D company.
Green Smoke's products closely resemble e-cigarettes that are on the market, but industry sources say that the uniqueness of the company's products is their reproducibility and user experience, giving the company an edge, and apparently the reason Altria acquired it.
Green Smoke's Beit Shemesh premises includes a laboratory which produces the vaporizing liquid and the prototype of the vaporizer - basically the cigarette. Production is carried out in China.
Green Smoke has 150 employees at its R&D center in Beit Shemesh, and 30 employees in the US and China. It had $40 million in sales in 2013. The company has operated quietly in Israel, and cannot sell its products in the country, because e-cigarettes are still banned. The company also never raised capital in Israel. Monday's press release said, "The agreement contains provisions to retain key management infrastructure and talent," implying that Green Smoke will continue its operations in the country.
Green Smoke's employees are a diverse lot, coming from Beit Shemesh, Modiin, and Jerusalem. They are secular and religious, with backgrounds in biology, engineering, chemistry, and marketing. Most employees are English speakers.
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014