Cott agrees to sell Cott Beverages to Refresco for $1.25bn
Cott Corporation has signed a definitive agreement to sell its beverage manufacturing business Cott Beverages to independent bottler Refresco for $1.25bn.
The deal includes Cott's North America, UK, and Mexico businesses, excluding the RCI International division, the RCI concentrate facility, and the Aimia Foods division.
Cott Beverages manufactures carbonated soft drinks, shelf-stable juice, energy drinks, flavoured waters, sports drinks, ready-to-drink (RTD) teas, freezables, and RTD alcoholic beverages.
Cott Beverages generates revenues of approximately $1.7bn. Following the closure of the deal, its leadership team will report to the executive board of Refresco.
Cott Corporation chief executive officer Jerry Fowden said: "After a thorough strategic review in 2013, we developed an accelerated diversification and acquisition strategy to transform our company and create a business weighted towards better-for-you products in categories with topline growth, a more diverse channel and customer base, higher margins, and strong free cash flow generation.
“This transaction is very much in line with this strategy, and enables our traditional business to become an integral part of a larger global beverage manufacturing company that pursues the same high customer service and quality standards Cott has been known for throughout its history."
Refresco chief executive officer Hans Roelofs said: "We are excited to welcome Cott Beverages to the Refresco family.
“We have been focused on growing our platform in both North America and Europe and this transaction is a significant enhancement to our buy and build strategy, which will provide Refresco with enlarged scale, synergies, and savings alongside Refresco's manufacturing footprint, geographic diversity, product range, and customer service.
"We will now have a well-balanced portfolio with exposure to all categories for retailers in North America and Europe in addition to a scale contract manufacturing footprint throughout these geographies from which to continue to grow both organically and by pursuing our buy and build strategy."
The transaction is expected to close in the second half of 2017 and is subject to certain closing conditions including regulatory approval, Refresco shareholder approval, and working capital adjustments.
Barclays served as financial advisor to Cott while Drinker Biddle & Reath acted as legal advisor.