Cott Corporation completed the acquisition of 82.2% stake in Primo Water Corporation from directors, officers and others for approximately $470 million.
The transaction is subject to various conditions, including a minimum tender of a majority of outstanding shares of Primo common stock, expiration of waiting period under the HSR Act, Form S-4 shall have become effective under the Securities Act, approval of listing of shares to be issued in the offer on the NYSE and TSX along with and other customary conditions. The transaction was unanimously approved by both the Cott and Primo Boards of Directors. The transaction is expected to close in March 2020. The tender offer will expire on February 25, 2020. As of February 26, 2020, the offering period has been extended until February 28, 2020.
John Huntington and Sandeep Desai of Deutsche Bank Securities Inc. acted as financial advisors while Goodmans LLP and Matthew H. Meyers of Drinker Biddle & Reath LLP acted as legal advisor to Cott. The Goldman Sachs Group, Inc. (NYSE:GS) acted as financial advisor and fairness opinion provider whereas Sean M. Jones of K&L Gates LLP acted as legal advisor to Primo. MacKenzie Partners, Inc. acted as information agent and Computershare Trust Company of Canada acted as exchange agent for Cott Corporation. Primo and Goldman Sachs provides for a transaction fee that is estimated at approximately $12 million.
Cott Corporation (TSX:BCB) completed the acquisition of 82.2% stake in Primo Water Corporation (NasdaqGM:PRMW) from directors, officers and others for approximately $470 million on February 28, 2020. As a part of agreement, the shares tendered into the exchange offer, 1,228,402 shares made an election to receive the mixed consideration, 393,517 shares made an election to receive the all- cash consideration, and 31,094,219 shares made an election to receive the all- stock consideration. As a part of closing, Primo stockholders elected to receive the mixed consideration or tendered without a valid election will receive the mixed consideration, which consists of $5.04 in cash and 0.6549 Cott common shares per share of Primo common stock or to receive the all- cash consideration will receive $14 in cash per share of Primo common stock; and elected to receive the all- stock consideration will be subject to proration at a rate of approximately 67.4% and will receive their consideration in the form of $14 in cash for each share not accepted for the all- stock election due to proration and 1.0229 Cott common shares per share of Primo common stock for shares that were accepted for the all- stock election. Primo stockholders will receive cash in lieu of fractional shares. As a result of the acquisition, shares of Primo common stock will cease to be traded on the NASDAQ. All remaining shares of Primo common stock not tendered pursuant to the exchange offer (other than shares of Primo common stock (a) held in the treasury of Primo or owned by any direct or indirect wholly owned subsidiary of Primo, (b) owned by Purchaser, Cott or any direct or indirect wholly owned subsidiary of Cott, and (c) in respect of which appraisal rights were perfected in accordance with Section 262 of the DGCL) were canceled in the merger and converted into the right to receive the merger consideration in the same amounts offered in the exchange offer. The transaction is expected to increase revenue growth and EBITDA margins, be accretive to earnings per share and deliver a cash on cash IRR above our cost of capital. The transaction was funded with $405 million cash on hand.