TORONTO and TAMPA, Florida, July
25, 2017 /PRNewswire/ --
Cott Corporation (NYSE: COT; TSX: BCB)
today announced that it has entered into a definitive agreement to
sell its traditional beverage manufacturing business ('Cott
Beverages') to Refresco (Euronext: RFRG) for USD $1.25 billion. The transaction includes Cott's
North America, U.K., and
Mexico businesses (excluding the
RCI International division and its associated concentrate facility
as well as the Aimia Foods division).
For over 60 years, Cott Beverages has been a leading
manufacturer of a diverse mix of beverages for the retail trade and
branded manufacturers, and is one of the world's largest producers
of beverages on behalf of retailers, brand owners and distributors,
producing multiple types of beverages in a variety of packaging
formats and sizes, including carbonated soft drinks, 100% shelf
stable juice and juice-based products, energy drinks, clear, still
and sparkling flavoured waters, sports drinks, new-age beverages,
ready-to-drink teas, freezables and ready-to-drink alcoholic
beverages. Cott Beverages has been known for its excellent customer
service and superb quality standards as demonstrated by the many
retail and product performance awards received over the years, and
has consistently offered its customers a strong value-added
proposition of low cost, high quality products while generating
strong free cash flows.
"After a thorough strategic review in 2013, we developed an
accelerated diversification and acquisition strategy in order to
transform our company and create a business weighted towards
better-for-you products in categories with top-line growth, a more
diverse channel and customer base, higher margins, and strong free
cash flow generation. This transaction is very much in line with
this strategy, and enables our traditional business to become an
integral part of a larger global beverage manufacturing company
that pursues the same high customer service and quality standards
Cott has been known for throughout its history," commented
Jerry Fowden, Cott's Chief Executive
Officer.
Cott Beverages generates approximately $1.7 billion in revenues and has a strong and
experienced management team with longstanding customer
relationships in North America and
the United Kingdom. Subsequent to
the closing of the transaction, Cott Beverages' leadership team
will report to the Executive Board of Refresco.
"We are excited to welcome Cott Beverages to the Refresco
family. We have been focused on growing our platform in both
North America and Europe and this transaction is a significant
enhancement to our buy and build strategy which will provide
Refresco with enlarged scale, synergies, and savings alongside
Refresco's manufacturing footprint, geographic diversity, product
range and customer service," commented Hans
Roelofs, Refresco's Chief Executive Officer. "We will now
have a well-balanced portfolio with exposure to all categories for
retailers in North America and
Europe in addition to a scale
contract manufacturing footprint throughout these geographies from
which to continue to grow both organically and by pursuing our buy
and build strategy," continued Mr. Roelofs.
STRATEGIC RATIONALE
"The sale of Cott's traditional business substantially
accelerates our ability to deleverage the business and positions us
well to grow our water, coffee, tea and filtration businesses both
organically and through value accretive tuck-in acquisitions while
also giving us the optionality to expand our platforms through
larger scale acquisitions if and when the right value enhancing
opportunities present themselves," continued Mr. Fowden.
The transaction is expected to:
- Improve top-line growth and stability
- Enhance overall gross profit and EBITDA margins
- Significantly reduce net leverage
- Reduce customer concentration
- Reduce commodity exposure
- Shift Cott's core focus to the growing categories of water,
coffee, tea and filtration
The transaction is expected to reduce Cott's leverage to below
3.5x net debt to 2017 pro forma adjusted EBITDA (excluding Cott
Beverages) after sale proceeds are used for the redemption of the
remaining $250 million of our 10% DS
senior secured notes, $525 million of
our 5.375% notes, and paying off our asset-based lending facility.
As a result of the redemption of our 5.375% notes, we expect to
commence asset sale proceed offers on or about the closing date of
the transaction pursuant to the indentures governing our then
remaining unsecured notes, pursuant to which we will offer to
repurchase such notes at 100% of the principal amount thereof.
The acquisition, which is expected to close in the second half
of 2017, is subject to certain closing conditions including
regulatory approval, Refresco shareholder approval, and working
capital adjustments.
Barclays acted as financial advisor to Cott while Drinker Biddle
& Reath LLP acted as legal advisor. In addition, Cott turned to
CMS for advice on Dutch law matters relating to the
transaction.
TRANSACTION CONFERENCE CALL
Cott Corporation will host a conference call today, July 25, 2017, at 8 a.m.
EST, to discuss the sale, which can be accessed as
follows:
North America:
(888)-231-8191
United Kingdom: 0-800-051-7107
International: (647)-427-7450
Conference ID: 58688747
A copy of the slide presentation that will be used on the call
will be available through Cott's website at http://www.cott.com.
The conference call will be a live audio webcast available via the
above referenced link and it will be recorded and archived for
playback for a period of two weeks following the call.
ABOUT COTT CORPORATION
Cott is a diversified beverage company with a leading
volume-based national presence in the North America and European home and office
bottled water delivery industry, a leader in custom coffee roasting
and blending of iced tea for the U.S. foodservice industry, and one
of the world's largest producers of beverages on behalf of
retailers, brand owners, and distributors. Our platform reaches
over 2.3 million customers or delivery points across North America and Europe supported by strategically located
sales and distribution facilities and fleets, as well as
wholesalers and distributors. This enables us to efficiently
service residences, businesses, restaurant chains, hotels and
motels, small and large retailers, and healthcare facilities.
ABOUT REFRESCO CORPORATION
Refresco (Euronext: RFRG) is the leading independent bottler of
soft drinks and fruit juices for retailers and A-brands with
production in Benelux, Finland,
France, Germany, Italy, Poland, Spain, the UK and the US. The company realized
in 2016 full year volumes and revenues of circa 6.5 billion litres
and circa €2.1 billion, respectively. Refresco offers an extensive
range of product and packaging combinations from 100% fruit juices
to carbonated soft drinks and mineral waters in carton, PET,
Aseptic PET, cans and glass. Focused on innovation, Refresco
continuously searches for new and alternative ways to improve the
quality of its products and packaging combinations in line with
consumer and customer demand, environmental responsibilities and
market demand. Refresco is headquartered in Rotterdam, the Netherlands and has about 5,500
employees.
Non-GAAP Measures
To supplement its reporting of financial measures determined in
accordance with GAAP, Cott utilizes certain non-GAAP financial
measures, including EBITDA, adjusted EBITDA and net debt (and
certain ratios utilizing these measures) to separate the impact of
certain items from the underlying business. Because Cott uses these
adjusted financial results in the management of its business,
management believes this supplemental information is useful to
investors for their independent evaluation and understanding of
Cott's underlying business performance and the performance of its
management. The non-GAAP financial measures described above are in
addition to, and not meant to be considered superior to, or a
substitute for, Cott's financial statements prepared in accordance
with GAAP. In addition, the non-GAAP financial measures included in
this earnings announcement reflect management's judgment of
particular items, and may be different from, and therefore may not
be comparable to, similarly titled measures reported by other
companies.
Safe Harbor Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 conveying
management's expectations as to the future based on plans,
estimates and projections at the time Cott makes the statements.
Forward-looking statements involve inherent risks and uncertainties
and Cott cautions you that a number of important factors could
cause actual results to differ materially from those contained in
any such forward-looking statement. The forward-looking statements
contained in this press release include, but are not limited to,
statements related to the use of proceeds, the completion of the
transaction on the terms proposed, the anticipated timing of the
transaction, the potential impact the acquisition will have on Cott
and related matters, and the execution of our strategic priorities.
The forward-looking statements are based on assumptions regarding
management's current plans and estimates. Management believes these
assumptions to be reasonable but there is no assurance that they
will prove to be accurate.
Factors that could cause actual results to differ materially
from those described in this press release include, among others:
the satisfaction of the conditions to the transaction and other
risks related to the completion of the transaction and actions
related thereto; Cott's and Refresco's ability to complete the
transaction on the anticipated terms and schedule, including the
ability to obtain shareholder and regulatory approvals; risks
relating to any unforeseen changes to or effects on liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, indebtedness, financial condition, losses and future
prospects; the risk that disruptions from the transaction will harm
Cott's business; and the effect of economic, competitive, legal,
governmental and technological factors on Cott's business.
The foregoing list of factors is not exhaustive. Readers are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Readers are
urged to carefully review and consider the various disclosures,
including but not limited to risk factors contained in Cott's
Annual Report on Form 10-K and its quarterly reports on Form 10-Q,
as well as other filings with the securities commissions. Cott does
not undertake to update or revise any of these statements in light
of new information or future events, except as expressly required
by applicable law.
Website: http://www.cott.com
Media Contact:
Jarrod Langhans
Investor Relations
Tel: +1(813)313-1732
Investorrelations@cott.com