TORONTO, ON and TAMPA, FL, Oct. 15,
2018 /PRNewswire/ - Cott Corporation (NYSE:COT) (TSX:BCB)
today announced that DS Services, a Cott Corporation subsidiary,
acquired The Mountain Valley Spring Company ("Mountain Valley") for
$78.5 million in cash from Great
Range Capital.
Mountain Valley is a fast-growing American brand of spring and
sparkling water and is one of the most recognized home and office
distribution ("HOD") brands in the United States. It has been
bottling in glass continuously since 1871, with one production
facility in Hot Springs, Arkansas,
and four protected and owned springs in the Ouachita Mountains with
excess capacity to supply long-term demand. Channels of
business include HOD, the natural food channel, on-premise,
E-commerce and strategic contract packing.
Dave Muscato, President - DS
Services, commented, "We are very excited about strengthening our
business and adding a fast-growing premium spring, sparkling and
flavored water American brand to our portfolio. We have added
not only a high growth premium water product but also an American
brand that we can offer to consumers in iconic glass
bottled packages."
Mountain Valley focuses on spring water bottled in a variety of
glass bottle sizes ranging from five-gallon bottles which are
delivered to homes and offices throughout the U.S. to single serve
sizes such as one liter, 500mL and 333mL. Over the years
Mountain Valley has added sparkling and flavored sparkling water in
glass bottles as well as lightweight plastic offerings for its
sparkling and spring water lines. Mountain Valley is uniquely
positioned as the premium American water brand and is a leader in
the high growth premium bottled water branded category as well as
the sparkling and flavored water categories. Mountain Valley
has grown revenue from approximately $39
million in 2015 to over $50
million in estimated sales for 2018, with high single digit
growth expectations for 2019.
"The Mountain Valley acquisition is another positive step in
building out our water solutions portfolio and meeting our stated
desire to continue to pursue acquisitions in the growing water and
coffee segments, where we believe our platform, operating strength
and synergies can be leveraged," commented Tom Harrington, Cott's Head of Route Based
Services and incoming Chief Executive Officer.
The purchase price was $78.5
million, on a debt and cash free basis, representing
approximately 8x estimated year 2 post-synergy adjusted EBITDA.
Cott financed the transaction through a combination of cash on hand
and drawing on its asset based lending facility. The
transaction closed on October 15,
2018. Additional financial and integration information
relating to the acquisition of Mountain Valley will be provided
during Cott's third quarter earnings release conference call
scheduled for November 8, 2018.
In addition to this press release, a document has been posted on
the Cott website (www.cott.com) under events and presentations
which provides additional information on Mountain Valley.
ABOUT COTT CORPORATION
Cott is a water, coffee, tea, extracts and filtration service
company with a leading volume-based national presence in the North
American and European home and office bottled water delivery
industry and a leader in custom coffee roasting, blending of iced
tea, and extract solutions for the U.S. foodservice industry.
Our platform reaches over 2.4 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 GREAT RANGE CAPITAL
Great Range Capital, a private equity firm based in greater
Kansas City, primarily targets
controlling equity investments in Midwestern companies with
revenues ranging from $20 to
$150 million. Learn more about
Great Range Capital at www.greatrangecapital.com.
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,
expected growth, synergies and contribution to Cott's performance,
and the potential impact the acquisition will have on Cott and
related matters. 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:
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; and unanticipated
changes in laws, regulations, or other industry standards affecting
the companies.
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
COTT
CORPORATION
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EXHIBIT
1
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SUPPLEMENTARY
INFORMATION - NON-GAAP - ACQUISITION OF MOUNTAIN
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VALLEY SPRING
COMPANY - YEAR 2 POST-SYNERGY EBITDA MULTIPLE
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(in millions of
U.S. dollars)
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Unaudited
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Year
2
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Net income
(1,2)
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~$ 2.8
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Interest expense and
income tax expense (1)
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~ 1.0
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Depreciation and
amortization (1)
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~ 4.5
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EBITDA
(1,2)
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~$ 8.3
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Synergies
(3)
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~ 1.5
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Post-synergy
EBITDA
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~$ 9.8
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Purchase
Price
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~$
78.5
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Post-synergy
EBITDA multiple
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~
8x
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(1) Before
purchase accounting adjustments
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(2)
Excludes acquisition and integration costs
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(3) Year 2
total synergies
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SOURCE Cott Corporation