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08/02/2022

Smoker Friendly Completes Its Largest Acquisition

The deal added 79 stores across five states.
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Smoker Friendly logo

BOULDER, Colo. — Smoker Friendly is adding to its footprint.

The retailer acquired Forrest City, Ark.-based Tobacco Superstores (TSS). The deal comprises 79 stores spread across Arkansas, Tennessee, Mississippi, Missouri, and Kentucky. The locations will be rebranded Smoker Friendly and carry the SF cigarette and tobacco product lines.

Smoker Friendly will operate these stores with the continued dedication to customer service, pricing, and product selection that TSS customers are accustomed to, according to The Cigarette Store LLC (TCS) dba Smoker Friendly.

"I could not be prouder of what has transpired over the past 11 years and where this has led. Tobacco Superstores consists of a great and proud group of people. Now, TSS can become part of something bigger," said Joe Marelle, CEO and owner of the Tobacco Superstores.

"I truly believe in the Gallagher family and their vision. I have had the honor of knowing Terry for 11 years, but have developed a deeper appreciation of his entire operation through working with others like his brother Dan. This is a special transaction that will lead to great things," Marelle added.

This is the fifth deal Boulder-based Smoker Friendly has completed in the past two years, bringing its store count to 260 in 12 states.

TCS is the largest licensee of Smoker Friendly International, and the largest tobacco store retailer in the United States, operating a mix of tobacco stores, cigar lounges, liquor stores and fueling locations under the Smoker Friendly, Tobacco Depot, Smoke 'N Go, Havana Manor and Gasamat banners, in addition to its e-commerce site, paylesscigarsandpipes.com. 

"We've known Joe Marelle for many years, so when he reached out expressing a desire to exit the business, we jumped at the opportunity this transaction presented. We are very excited about the stores and their great team joining Smoker Friendly and expanding our corporate store footprint in these great southern states," said Smoker Friendly CEO Terry Gallagher.

"This is our largest acquisition to date and I'm very proud of our team and the many hours expended to close this deal. We are actively pursuing additional acquisitions and continue to be bullish on growth opportunities," he said.

Growth Path

Since late 2019 Smoker Friendly's acquisitions included 33 Smoker's Outlet stores in Missouri, 22 Tobacco Road Outlet locations in North Carolina, and three Smoker Friendly dealer stores in North Carolina.

In early 2018, Smoker Friendly's holding company, Bolder Panther Group LLC, completed a minority recapitalization and debt restructure with Main Street Capital Corp.

In the transaction, Main Street funded $51.7 million in a combination of first-lien, senior secured term debt and a direct preferred equity investment. Smoker Friendly continues to be owned and operated by the Gallagher family and led by the current management team.

Main Street also provided the company with a revolving line of credit to support its working capital needs and agreed to make a delayed draw term loan available to the company to assist with its acquisition growth strategy.