Cott to Rebrand its Corporate Name to Primo
Water Corporation and Assume the Ticker PRMW on the NYSE and
TSX
TAMPA, FL, March 2, 2020 /PRNewswire/ - Cott
Corporation (NYSE:COT; TSX:BCB) (the "Company" or "Cott"), today
announced the completion of the acquisition of Primo Water
Corporation ("Primo"), a leading provider of water dispensers,
purified bottled water, and self-service refill drinking water in
the U.S. and Canada.
The acquisition of Primo is consistent with Cott's strategy of
transitioning to a pure-play water solutions provider. Primo is a
growing business with over $300
million in 2019 revenues. The acquisition adds further
density to the distribution platform of Cott's existing North
American business by adding leading scale water solutions
businesses to its portfolio. The transaction is expected
to increase revenue growth and EBITDA margins, be accretive to
earnings per share and deliver a cash on cash IRR above our cost of
capital.
Cott has conducted an exchange offer by its wholly-owned
subsidiary, Fore Acquisition Corporation ("Purchaser"), for all of
the outstanding shares of common stock of Primo. The consideration
is $14.00 per share, payable in cash,
stock, or a combination thereof at the election of Primo's
stockholders, subject to the terms of the merger agreement. The
transaction values Primo at approximately $775 million.
As a part of the transaction, Cott will change its name to Primo
Water Corporation and its common shares will trade under the ticker
PRMW on the NYSE and the TSX.
"The Primo acquisition is another great step in our strategy to
become a pure-play water solutions provider with financial metrics
more in line with our peers," said Tom
Harrington, Cott's Chief Executive Officer. "We firmly
believe that our combined businesses will drive significant value
for our shareholders over the coming years," continued Mr.
Harrington.
Deutsche Bank Securities Inc. acted as financial advisor to Cott
and Faegre Drinker Biddle & Reath LLP and Goodmans LLP provided
legal counsel to Cott. Goldman Sachs acted as financial advisor to
Primo and K&L Gates LLP provided legal counsel to Primo.
Exchange Offer Details
The depositary and paying agent for the exchange offer has
advised that, as of 5:00 p.m.,
New York City time, on
February 28, 2020, the expiration of
the exchange offer, 32,716,138 shares of common stock of Primo were
tendered pursuant to the exchange offer, representing approximately
81.1% of the issued and outstanding shares of common stock of
Primo. The condition to the exchange offer that at least a majority
of the issued and outstanding shares of Primo (as determined
pursuant to the merger agreement) be validly tendered and not
validly withdrawn and all other conditions to the exchange offer
have been satisfied. Accordingly, Purchaser has accepted payment
and will promptly pay the depositary for all validly tendered
shares.
Of the shares tendered into the exchange offer, 1,228,402 shares
made an election to receive the mixed consideration, 393,517 shares
made an election to receive the all-cash consideration, and
31,094,219 shares made an election to receive the all-stock
consideration.
- Primo stockholders who elected to receive the mixed
consideration or tendered without a valid election will receive the
mixed consideration, which consists of $5.04 in cash and 0.6549 Cott common shares per
share of Primo common stock;
- Primo stockholders who elected to receive the all-cash
consideration will receive $14.00 in
cash per share of Primo common stock; and
- Primo stockholders who elected to receive the all-stock
consideration will be subject to proration at a rate of
approximately 67.4% and will receive their consideration in the
form of $14.00 in cash for each share
not accepted for the all-stock election due to proration and 1.0229
Cott common shares per share of Primo common stock for shares that
were accepted for the all-stock election.
Primo stockholders will receive cash in lieu of fractional
shares. As a result of the acquisition, shares of Primo common
stock will cease to be traded on the NASDAQ.
Following Purchaser's acceptance of the Primo shares tendered in
the exchange offer, Cott completed the acquisition of Primo on
March 2, 2020 through a merger under
Section 251(h) of the General Corporation Law of the State of Delaware (the "DGCL"). All remaining
shares of Primo common stock not tendered pursuant to the exchange
offer (other than shares of Primo common stock (a) held in the
treasury of Primo or owned by any direct or indirect wholly owned
subsidiary of Primo, (b) owned by Purchaser, Cott or any direct or
indirect wholly owned subsidiary of Cott, and (c) in respect of
which appraisal rights were perfected in accordance with Section
262 of the DGCL) were canceled in the merger and converted into the
right to receive the merger consideration in the same amounts
offered in the exchange offer. Holders of these shares will have
the opportunity to elect among the mixed consideration, the
all-cash consideration and the all-stock consideration, subject to
proration, as described in the prospectus/offer to exchange, dated
February 18, 2020, filed by Cott with the Securities and Exchange
Commission in connection with the transaction.
ACQUISITION MODELING CONFERENCE CALL
Cott will host an investor day on Tuesday
March 24, 2020 from 1:30 p.m. Eastern
Time to 4:00 p.m. Eastern Time and will incorporate
financial modeling information regarding the Primo acquisition as a
part of the presentations. A live audio webcast will be available
through the Company's website at http://www.cott.com. The webcast
will be recorded and archived for playback on the investor
relations section of the website for two weeks following the event.
A copy of the slide presentation that will be used on the call will
be available through Cott's website prior to the call on
March 24, 2020.
ABOUT COTT CORPORATION
Cott is a pure-play water solutions provider with a leading
volume-based national presence in the North American and European
home and office delivery industry for bottled water, a top five
position across point of use or filtration within our 21-country
footprint as well as leading positions in water dispensers,
purified bottled water, and self-service refill drinking water in
the U.S. and Canada. Our platform
reaches over 2.5 million customers across North America and Europe and is supported by strategically
located sales and distribution facilities and fleets, as well as
wholesalers and distributors. This enables us to efficiently
service residences, businesses, and small and large retailers.
Non-GAAP Measures
To supplement its reporting of financial measures determined in
accordance with GAAP, Cott utilizes certain non-GAAP financial
measures. 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. With respect to our expectations of
performance of Primo as it is being integrated, reconciliations of
2020 estimated adjusted EBITDA, earnings accretion and cash on cash
IRR are not available, as we are unable to quantify certain amounts
that would be required to be included in the relevant GAAP measures
without unreasonable effort. We expect that the unavailable
reconciling items, which primarily include taxes, interest costs
that would occur if the company issued debt, costs to capture
synergies and phasing of capex, could significantly affect our
financial results. These items depend on highly variable factors
and any such reconciliations would imply a degree of precision that
would be confusing or misleading to investors. We expect the
variability of these factors to have a significant, and potentially
unpredictable, impact on our future GAAP financial results. 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.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, Section
21E of the Securities Exchange Act of 1934 and applicable Canadian
securities laws conveying, among other matters, management's
expectations as to the future based on plans, estimates and
projections at the time these statements are made. Forward-looking
statements can otherwise be identified by the use of words such as
"anticipate," "believe," "could," "estimate," "expect," "feel,"
"forecast," "intend," "may," "plan," "potential," "predict,"
"project," "seek," "should," "would," "will," and similar
expressions intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. The forward looking statements in this press
release include, but are not limited to, statements related to the
expectations in respect of the financial profile of the combined
company and expected synergies associated with the transactions,
including any contribution of Primo's acquisition to Cott's
performance, and the potential impact the acquisition will have on
Primo or Cott and other matters related to either or both of them.
Forward-looking statements involve inherent risks and uncertainties
and the Company 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 are based on assumptions regarding
management's current plans and estimates. Factors that could cause
actual results to differ materially from those described in this
press release include, among others: changes in estimates of future
earnings and cash flows; expected synergies and cost savings are
not achieved or achieved at a slower pace than expected;
integration problems, delays or other related costs; retention of
customers and suppliers; the cost of capital necessary to finance
the transaction; the negative effects of the consummation of the
transaction on the market price of Cott's common stock or on Cott's
operating results; the risk of litigation action related to the
proposed transaction; unanticipated changes in laws, regulations,
or other industry standards affecting the companies and other risks
and important factors contained and identified in Cott's and
Primo's filings with the SEC, including their respective Quarterly
Reports on Form 10-Q and Annual Reports on Form 10-K. The foregoing
list of factors is not exhaustive. Readers are cautioned not to
place undue reliance on these 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 and Primo's respective
Annual Reports on Form 10-K and their quarterly reports on Form
10-Q, as well as other periodic and current reports and other
filings filed with the securities commissions. Neither Cott nor
Primo undertakes to update or revise any of these statements in
light of new information or future events, except as expressly
required by applicable law.
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