ATLANTA, Nov. 6, 2014 /PRNewswire/ -- DS Services
Holdings, Inc. ("DS Services"), a leading national
direct-to-consumer provider of bottled water, office coffee and
water filtration services, today announced that its sole
stockholder and parent company, DSS Group, Inc. ("DSS") has entered
into a definitive merger agreement to be acquired by Cott
Corporation (NYSE:COT; TSX:BCB) for approximately $1.25 billion, including the assumption of debt
and the issuance of preferred shares to Crestview Partners and
other selling shareholders.
The acquisition will extend Cott's beverage portfolio into new
and growing markets, including water and coffee home and office
delivery services, water filtration services, and retail services,
while creating cost synergies as well as portfolio expansion. In
addition, the acquisition is expected to broaden the distribution
platform of Cott by adding a national direct-to-consumer
distribution channel with the 2,100 customer routes operated by
DSS.
TRANSACTION CONFERENCE CALL
Cott Corporation will host a conference call today, November 6, 2014, at 8:30
a.m. EST, to discuss the acquisition, which can be accessed
as follows:
North America: (877)
407-8031
International: (201) 689-8031
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/en/for-investors/events-and-presentations. 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.
COMPELLING STRATEGIC RATIONALE
The acquisition of DSS will accelerate Cott's acquisition based
diversification outside of carbonated soft drinks and shelf stable
juices, and is in line with Cott's strategy of focusing on higher
margin growth oriented businesses in beverage and beverage
adjacencies. The acquisition gives Cott a complementary beverage
platform for growth while diversifying Cott's channel mix beyond
large format retail and supermarket stores. The acquisition is
expected to:
- Improve top-line growth
- Enhance overall gross profit and EBITDA margins
- Provide significant diversification across product categories,
packaging formats and raw material purchases
- Offer a new direct route to market that will improve channel
mix beyond large format retail and supermarket stores
- Reduce customer concentration
- Provide cost and revenue synergies of approximately
$25 million per year by the end of
2017
Jerry Fowden, Cott's Chief
Executive Officer commented, "Tom
Harrington and his talented management team have done a
great job building DSS. We are delighted that they will continue to
lead the company going forward as we work together to drive future
growth."
Tom Harrington, CEO and President
of DSS noted, "We firmly believe that bringing DSS 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 drive growth, while creating cost synergies as
well as portfolio expansion. On a final note, we want to thank
Crestview Partners. They have been very supportive partners to DS
and to me personally."
Jeff Marcus, DSS's Chairman and a
Partner at Crestview, commented, "We have the highest regard for
Tom and his team and have greatly enjoyed our partnership. We
believe this transaction will enable DSS to accelerate its growth
initiatives and will firmly establish Cott as a leader in the
beverage space." Mr. Marcus will serve on Cott's Board of
Directors as an observer.
Upon completion of the acquisition, DSS will operate as a
subsidiary of Cott, based in Atlanta,
Georgia. DSS will continue to be led by Tom Harrington, DSS's current CEO and President,
as well as the company's present leadership team. The acquisition
is expected to close by the end of January 2015.
Barclays acted as financial advisor to DSS on the transaction.
Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal
advisor.
Credit Suisse acted as financial advisor to Cott on the DSS
transaction. Drinker Biddle & Reath LLP acted as legal
advisor.
ABOUT DS SERVICES
DS Services is a national direct-to-consumer provider of bottled
water, office coffee and water filtration services. DS Services
offers a comprehensive portfolio of beverage products, equipment
and supplies to approximately 1.5 million customers through its
network of over 210 sales and distribution facilities and daily
operation of over 2,100 routes. With one of the broadest
distribution networks in the country, DS Services can provide
service to approximately 90 percent of U.S. households and
efficiently services homes and national, regional and local
offices. DS Services is dedicated to achieving its mission of
becoming America's favorite water, coffee and tea service provider
where consumers live, work and play. Please visit our website
www.water.com for more information about DS Services.
ABOUT COTT CORPORATION
Cott is one of the world's largest producers of beverages on
behalf of retailers, brand owners and distributors. Cott
produces multiple types of beverages in a variety of packaging
formats and sizes, including carbonated soft drinks, 100% shelf
stable juice and juice-based products, clear, still and sparkling
flavored waters, energy drinks and shots, sports drinks, new age
beverages, ready-to-drink teas, beverage concentrates, liquid
enhancers, freezables and ready-to-drink alcoholic beverages, as
well as hot chocolate, coffee, malt drinks, creamers/whiteners and
cereals. Cott's large manufacturing footprint, substantial
research and development capability and high-level of quality and
customer service enables Cott to offer its customers a strong
value-added proposition of low cost, high quality products.
With over 4,000 employees, Cott operates manufacturing facilities
in the United States, Canada, the United
Kingdom and Mexico. Cott also develops and
manufactures beverage concentrates which it exports to
approximately 50 countries around the world.
ABOUT CRESTVIEW PARTNERS
Founded in 2004, Crestview Partners is a value-oriented private
equity firm focused on the middle market. The firm is based in
New York and has approximately
$6 billion of assets under
management. The firm is led by a group of partners who have
complementary experience and distinguished backgrounds in private
equity, finance, operations and management. Crestview has senior
investment professionals focused on sourcing and managing
investments in each of the media, energy, financial services and
healthcare industries. For more information, visit
www.crestview.com.
Safe Harbor Statements
Statements contained herein that are not historical facts are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995. You can generally
identify forward-looking statements because they contain words such
as "believes," "projects," "might," "expects," "may," "will,"
"should," "seeks," "approximately," "intends," "plans," or
"anticipates" or similar expressions that concern our strategy,
plans or intentions. While we believe that the expectations
reflected in such forward-looking statements are reasonable, we
caution that it is very difficult to predict the impact of known
factors, and it is impossible to anticipate all factors that could
affect our actual results. All forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ from those set forth in such forward-looking
statements.
You should consult other disclosures made by DS Services,
including the risk factors included in our most recently filed
Registration Statement on Form S-4 filed with the Securities and
Exchange Commission ("SEC") and disclosures made in other filings
with the SEC, for other factors that may cause actual results to
differ materially from those included in our forward-looking
statements. We caution you not to place undue reliance on
forward-looking statements, as they speak only as of the date made
and are inherently uncertain. We undertake no obligation to
publically revise or update such statements, except as required by
applicable securities laws.
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SOURCE DS Services Holdings, Inc.