Japan Tobacco (JT) agreed to purchase Egyptian shisha maker Nakhla Tobacco, an acquisition the cigarette manufacturer said will broaden its product range and provide a base for eventual expansion in the Egyptian cigarette market.

Nakhla pioneered the use of aromatic molasses for waterpipes and holds a 70 per cent share of the Egyptian market, JT said in a statement. Nakhla products are sold in 85 countries.
“Our acquisition of Nakhla offers and excellent opportunity for growth in the waterpipe segment and widens our brand portfolio,” said Fadoul Pekhazis, a regional president for Japan Tobacco International. “The acquisition enhances JTI’s geographical footprint in the Middle East and Africa, and over the long term, provides a platform for JTI to participate in the sizeable cigarette market in Egypt," he said.
A purchase price was not given, however JT said it will pay a high single-digit multiple of Nakhla’s underlying earnings in 2011 before interest, tax, depreciation and amortization. JT said it expects to close the deal before the end of the fiscal year on 31 March. (ci)