Cott Corporation to rebrand following acquisition of US$775m-valued Primo Water

CANADA – Cott Corporation has entered into a definitive agreement to acquire Primo Water Corporation in a deal that will see Cott rebrand its corporate name to Primo Water Corporation.

According to Cott, the transaction, which values Primo at approximately US$775 million, was unanimously approved by both the Cott and Primo Boards of Directors.

Primo is a leading provider of water dispensers, purified bottled water, and self-service refill drinking water in the Unites States and Canada.

The combination of Cott and Primo, along with the recent announcement of Cott’s evaluation of certain strategic alternatives for its S&D Coffee and Tea business, including a sale of S&D, will transition Cott into a pure-play water company.

The newly created company will have approximately US$2.0 billion in combined water sales and a presence in 21 countries worldwide. 

“I am excited, as the acquisition of Primo and planned sale of S&D will result in a pure-play water company that increases top-line growth and margins and drives long-term value creation for our shareholders,” said Tom Harrington, Cott’s CEO.

“As we turn to our new business model, we are taking the opportunity to rebrand our company as Primo Water Corporation to reflect the leading position we have in the growing and attractive water market with the opportunity to be revalued in line with our water peers.

“As Primo and Cott have been strategic partners for six years, we expect a smooth transition and integration.”

Billy D. Prim, Primo’s interim CEO and Executive Chairman, commented, “This combination of two highly recognized water companies creates compelling value for all stakeholders, including our customers, employees, shareholders and suppliers.

“We are excited about the opportunity to provide sustainable hydration solutions to more people than either company could have done alone.”

The acquisition of Primo and Cott’s continued transition into a pure-play water solutions provider is expected to, inter alia, provide a singular water-focused company, positioned to succeed in higher growth and higher margin water categories as a rebranded entity with the opportunity to be revalued in line with our water peers.

Under the terms of the merger agreement, a wholly-owned subsidiary of Cott will promptly commence an exchange offer to acquire all of the outstanding shares of Primo’s common stock.

Following consummation of the exchange offer, that subsidiary will merge with and into Primo and Primo will become a wholly-owned subsidiary of Cott. Upon completion of the acquisition, Primo shares will cease to be traded on Nasdaq.

Cott will pay a total of approximately US$216 million in cash to Primo stockholders, funded with the proceeds of a new term debt issuance or proceeds from the sale of S&D Coffee and Tea, and issue approximately 26.8 million new shares to Primo stockholders.

Cott revealed that it has obtained financing commitments of up to US$400 million from an affiliate of Deutsche Bank Securities Inc. to support the payment of the acquisition price and the refinancing of Primo’s debt.

In connection with the execution of the merger agreement, Billy D. Prim and Susan E. Cates, current members of Primo’s board of directors, will join Cott’s board following the closing.

The transaction is expected to close in March 2020, subject to the conditions to the exchange offer and other customary closing conditions.

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