MO Altria Group Inc

By Dana Mattioli and Jennifer Maloney 

Altria Group Inc. is nearing a deal to take a 35% stake in e-cigarette startup Juul Labs Inc. at a roughly $38 billion valuation, according to people familiar with the matter, an investment that would make Juul one of the most valuable private companies.

The $12.8 billion cash injection could be announced as soon as this week. It would more than double what Juul was valued at just a few months ago, a sign of how quickly the startup has been growing and Altria's desire to find growth outside its shrinking cigarette business. The Wall Street Journal earlier reported on the discussions.

At $38 billion, three-year-old Juul would be worth more than several well-known Silicon Valley startups, including Airbnb, the home-sharing service, and Elon Musk's space venture SpaceX, and nearly three times as much as Pinterest. Juul's valuation would be on par with the market capitalization of public companies such as Delta Air Lines Inc., Target Corp. and Ford Motor Co.

Juul, which has about 1,500 employees, was on track for $2 billion in annual revenue. It has outperformed its internal forecasts from its funding round over the summer, according to a person familiar with the matter. The company has profit margins as high as 75%, the person added, which is much higher than traditional tobacco.

Write to Dana Mattioli at dana.mattioli@wsj.com and Jennifer Maloney at jennifer.maloney@wsj.com

(END) Dow Jones Newswires

December 19, 2018 13:13 ET (18:13 GMT)

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