Cott acquires Primo Water, seeks buyer for S&D Coffee and Tea

Cott has entered into a definitive agreement pursuant to which Cott will acquire Primo Water for $14 per share, a transaction that values Primo at approximately $775 million. The acquisition has been unanimously approved by both the Cott and Primo boards of directors. Primo is a provider of water dispensers, purified bottled water, and self-service refill drinking water in the United States and Canada.

The combination of Cott and Primo, along with the recent announcement of Cott’s evaluation of certain strategic alternatives for its S&D Coffee and Tea business, including a sale of S&D, will transition Cott into a pure-play water company. Cott acquired the 92-year-old coffee and tea company for approximately $355 million in August 2016.

“I am excited, as the acquisition of Primo and planned sale of S&D will result in a pure-play water company that increases top-line growth and margins and drives long-term value creation for our shareholders. As we turn to our new business model, we are taking the opportunity to rebrand our company as Primo Water Corp. to reflect the leading position we have in the growing and attractive water market with the opportunity to be revalued in line with our water peers,” said Tom Harrington, Cott’s CEO, in a company press release. “As Primo and Cott have been strategic partners for six years, we expect a smooth transition and integration.”

The transaction is expected to close in March 2020, subject to the conditions to the exchange offer and other customary closing conditions.

Press release