Cott Announces U.K. Business Unit's Acquisition of Aimia Foods
30 May 2014 - 10:00PM
Marketwired
Cott Announces U.K. Business Unit's Acquisition of Aimia Foods
TORONTO, ON and TAMPA, FL--(Marketwired - May 30, 2014) - Cott
Corporation (NYSE: COT) (TSX: BCB) today announced that its United
Kingdom / Europe ("U.K.") Business Unit has acquired all subsidiary
companies of Aimia Foods (Holdings) Limited. Aimia Foods is a
privately owned business based in Merseyside, United Kingdom with
revenues of approximately USD$110 million for the twelve months
ending March 31, 2014.
The purchase price includes the payment of approximately USD$80
million at closing plus an adjustment for working capital, USD$33
million in deferred consideration payable in September 2014, and
on-target earnout consideration of USD $20 million, with a minimum
earnout consideration of USD $13 million and a maximum earnout
consideration of USD$27 million. The purchase price will be funded
through cash on hand and borrowings under Cott's asset based
lending facility.
Steve Corby, Managing Director of the U.K. Business Unit,
commented: "The Aimia Foods acquisition accelerates our
diversification strategy, bringing a strong hot and cold beverage
platform and multiple foodservice relationships into our
portfolio. Aimia has extensive expertise in new product
categories, packaging formats and trade channels, such as the
packaging of powdered beverages, which we believe enhances the
diversification opportunities available to the combined
businesses. Aimia's core strengths lie in the manufacturing,
sale and marketing of Aimia-owned and third party licensed beverage
brands across all sectors of the U.K. market, including
Foodservice, Vending, Cash & Carry and Retail. Aimia has been
highly successful in maintaining strong relationships with leading
brand-owners and outsourcing partners, and we look forward to
continuing to build these relationships under Aimia's current
leadership team."
Rob Unsworth, Managing Director of Aimia Foods, said: "We firmly
believe that bringing Aimia Foods into the Cott family will provide
additional opportunities for the benefit of our employees and
customers alike. Our leadership team is excited to work with Cott
to keep building on the strong foundation already established."
Compelling Strategic
Rationale The transaction is intended to accelerate in both
pace and scale Cott's acquisition based diversification outside of
carbonated soft drinks and shelf stable juices, with a focus on
other beverage categories and beverage adjacencies, as well as on
driving our channel mix beyond large format retail and supermarket
stores.
- Enhances Product Diversification. Aimia provides
access to growing higher value categories, with approximately
85% of Aimia's revenues attributable to categories new to
Cott, including hot chocolate, coffee, malt drinks,
creamers/whiteners and cereals.
- Improves Channel Diversification. Aimia has a strong
presence outside large format retail and supermarket stores,
with approximately 40% of revenues in the wholesale, vending
and foodservice channels and 35% of revenues from contract
manufacturing.
- Expands Packaging Capabilities. Aimia provides new
packaging formats, including pouches, jars, sticks,
in-cup products, sachets and block-bottom bags.
- Enhances Operational Platform. The transaction brings
together two best-in-class operators with a shared low-cost
operational approach and scalable infrastructure, creating
a stable platform for future expansion opportunities.
Financial
Highlights The combination is expected to be accretive to
both earnings and free cash flow in the first year. Cott also
expects to realize incremental revenue growth opportunities based
on its expanded product portfolio and broader channel
diversification. The year 2 post synergy adjusted EBITDA
multiple is expected to be in the 5x to 6x range and the cash on
cash IRR in the mid to high teens.
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 relating to Cott's acquisition
of Aimia Foods, the performance of the combined business in the
future, the impact of the acquisition on Cott's operating results
and financial position, and Cott's strategies for growth. 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: (1) Cott's plans, strategies, objectives,
expectations and intentions are subject to change at any time at
the discretion of Cott; (2) the ability to integrate Aimia Foods
into Cott with no substantial adverse effect on the acquired
entity's or Cott's operations, employee relationships, retailer
relationships, supplier relationships, customer relationships or
financial performance; and (3) expected synergies and cost savings
are not achieved or achieved at a slower pace than expected; (4) in
connection with the acquisition of Aimia Foods, Cott has borrowed
significant amounts and will have to use a significant portion of
its cash flows to service such indebtedness, as a result of which
Cott might not have sufficient funds to operate its businesses in
the manner it intends or has operated in the past; and (5) other
risks and uncertainties indicated from time to time in Cott's
filings with the Securities and Exchange Commission.
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 periodic reports filed 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
CONTACT: Jarrod
Langhans Investor Relations Tel: (813) 313-1732 Email Contact
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