TORONTO, ON and TAMPA, FL--(Marketwired - Aug 2, 2016) - Cott Corporation announced today that it has closed its previously announced acquisition of Eden Springs ("Eden"), a leading European direct-to-consumer services provider specializing in home and office delivery ("HOD") water, office coffee services ("OCS") and filtration. Eden was held by investment funds affiliated with Rhône Capital and was purchased for EUR 470 million, on a debt and cash free basis.
The Eden acquisition is consistent with Cott's stated diversification strategy to expand in HOD water, coffee and tea services as well as filtration services where its platform, operating strength and potential synergies can be leveraged. Eden is a scale business that generated over EUR 360 million in pro forma revenues during 2015. The acquisition broadens the distribution platform of Cott's existing UK/European business by providing access to a direct-to-consumer route distribution platform in Europe serving over 800,000 homes and offices. In line with Cott's strategy, the acquisition is expected to be accretive to adjusted free cash flows in its first full year and provide a cash on cash IRR above its cost of equity.
"The Eden acquisition further accelerates Cott's diversification and is another great step in our stated strategy to pursue opportunities in the higher margin home and office water delivery, coffee, tea and filtration categories where we believe we can leverage our platform and operating strength to drive synergies and build shareholder value," commented Jerry Fowden, Cott's Chief Executive Officer.
Tom Harrington, DS Services CEO, will continue in that capacity at DS Services, and will also oversee Eden Springs, which will assist in fully leveraging best practices, procurement scale, back office processes and synergies across Cott's HOD businesses.
Tom Harrington commented, "We are very excited about expanding our platform into the European market. We firmly believe that our combined businesses will create an even stronger, cash generating, growth and service oriented platform across North America and Europe. In addition, these platforms not only provide opportunity for organic growth but we also expect to capitalize on Eden's and DS Services' combined scale in procurement and expertise in follow on tuck-in acquisitions."
Raanan Zilberman, Eden's CEO, commented, "We are excited to join the Cott family. The transaction is an important step as we strengthen our international capacity and enhance our market-leading position. Furthermore, we believe that the transaction will enable the expansion of our portfolio and services, and will provide increased opportunities for our employees and customers alike."
The purchase price is approximately EUR 470 million, on a debt and cash free basis, representing a mid 7x Eden's estimated adjusted 2016 run rate EBITDA of over EUR 60 million (mid 6x multiple including estimated run-rate synergies of approximately EUR 10 million). Cott financed the transaction through a combination of cash on hand and the private placement of EUR 450 million in aggregate principal amount of 5.50% senior notes due January 1, 2024. As a part of Cott's second quarter 2016 earnings release, Cott will announce a date for a separate modeling call which will include additional financial information.
