Frost makes investment in cigarette company
Philip Frost, a dermatologist who has built up two major pharmaceutical companies in South Florida that made branded and generic pills to treat diseases, has just made a $50 million investment in a Miami cigarette company.
Vector Group Ltd., a holding company that makes and distributes a variety of brands,said a Frost-controlled firm was taking $50 million in 6.25 percent convertible notes due in 2008 and giving Frost Gamma Investments about 2.3 million shares of Vector valued at $21.32 per share.
As an inducement to make the exchange, Vector was also giving Frost Gamma Investments additional unregistered shares that can be used later under certain conditions.
Vector's brands include Liggett Select, Eve, Jade, Pyramid, USA and various private-label products.
Well-known investor Carl Icahn, through another corporate entity, is converting $20 million in Vector notes under similar circumstances. Icahn already controls 9.5 million of Vector's shares, but this will be Frost's first major investment in the company.
In Miami, Frost has started and sold two major drug companies, Key Pharmaceuticals and IVAX.
The IVAX sale to Teva Pharmaceutical Industries earlier this year left Frost with Teva stock worth $599 million. Frost also received about $517 million in cash, which he is now investing in new ventures.
