Refresco acquires Cott’s beverage business
Cott Corporation has agreed to sell its beverage manufacturing business, Cott Beverages, to Refresco for USD $1.25 billion. The transaction includes Cott’s North America, UK, and Mexico businesses (excluding the RCI International division and its associated concentrate facility as well as the Aimia Foods division).
Jerry Fowden, Cott’s chief executive officer, comments, “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.”
Cott Beverages generates approximately $1.7 billion in revenues. Subsequent to the closing of the transaction, Cott Beverages’ leadership team will report to the executive board of Refresco.
Hans Roelofs, Refresco’s chief executive officer, adds, “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.”
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; cut down commodity exposure; and shift Cott’s core focus to the growing categories of water, coffee, tea and filtration.
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.
