Monday 9 June 2014 5:32 am

VEC lands third British ecigarette company as industry booms

US Victory Electronic Cigarettes (VEC) has acquired its third British ecigarette company in six months for $104m (£62m).

Ten Motives, one of the largest and fastest growing ecigarette companies in Europe, was founded in 2008 by former telecoms Art Devlin. Ten Motives has long term relationships with leading retailers, such as Sainsbury's, Tesco and Bargain Booze.

Devlin, who was later joined by Tony Jones, was inspired to create Ten Motives after his own first-hand experience with ecigarettes. After a week of vaping, Devlin did not feel the urge smoke a regular cigarette and realised the product had huge potential.

The two entrepreneurs will receive a combination of cash and shares for the company. Since its founding, Ten Motives has replaced up to 400m regular cigarettes.

The deal can be seen as part of VEC's go-big-or-go-home strategy, with the company's president going so far as to equate VEC's strategy to that of a military campaign.

Speaking to Crain's Detroit Business, VEC's president and West Point graduate, Brent Willis said: "In his study of war, Clausewitz talked about the ability of manoeuvere — for us, that means speed, moving faster than the competition. You have to do the right thing — and you have to do the right thing at the right time."

Victory's previous UK acquisitions include Vapestick for $70m and VIP for $50m.

The number of ecigarette users in the UK has soared, from 700,000 in 2012, to 2.1m, according to Action for Smoking on Health (ASH).

The anti-smoking lobby group found that half of former smokers had tried ecigarettes. Some of the world's largest tobacco companies have been quick to move with the trend by introducing ecigarettes of their own.

Last summer, British American Tobacco launched its Vype ecigarette. The industry is not only booming in size, with American lender Wells Fargo predicting that ecigarettes could be outselling conventional cigarettes within a decade, but also in product innovation.

Last week, Paris-based company Smokio launched the world's first smart ecigarette, available for £65. The device connects to a smartphone app tracking the owner's usage, providing updates on both their health and finances.

"In my career, there has not been a sector that has so much potential and is so untapped in terms of value and global reach," said Jim McCormick, CFO of VEC. The West Michigan company hopes to be the largest independent producer of vaping products in the US.