Cott Announces Agreement to Sell Its Traditional Beverage

Cott Corporation
Cott Announces Agreement to Sell Its Traditional
Beverage Manufacturing Business to Refresco in
All-Cash Transaction
TORONTO and TAMPA, FL, July 25, 2017 /CNW/ - 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 flavored 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 topline 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
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 Abrands 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 liters 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: www.cott.com
SOURCE Cott Corporation
For further information: Jarrod Langhans, Investor Relations, Tel: (813) 313-1732, Investorrelations@cott.com
http://www.cott.com/2017-07-25-Cott-Announces-Agreement-to-Sell-Its-Traditional-Beverage-ManufacturingBusiness-to-Refresco-in-All-Cash-Transaction
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