TORONTO, ON and TAMPA, FL –Cott Corporation (NYSE:COT; TSX:BCB) announced on May 30, 2014, that its United Kingdom / Europe (“U.K.”) Business Unit has acquired all subsidiary companies of Aimia Foods (Holdings) Limited.
Aimia Foods is a privately owned business based in Merseyside, United Kingdom with revenues of approximately USD$110 million for the twelve months ending March 31, 2014.
The purchase price includes the payment of approximately USD$80 million at closing plus an adjustment for working capital, USD$33 million in deferred consideration payable in September 2014, and on-target earnout consideration of USD $20 million, with a minimum earnout consideration of USD $13 million and a maximum earnout consideration of USD$27 million.
The purchase price will be funded through cash on hand and borrowings under Cott’s asset based lending facility.
Jerry Fowden, Cott’s Chief Executive Officer, commented: “The Aimia Foods acquisition accelerates our diversification strategy, bringing a strong hot and cold beverage platform and multiple foodservice relationships into our portfolio.
Aimia has extensive expertise in new product categories, packaging formats and trade channels, such as the packaging of powdered beverages, which we believe enhances the diversification opportunities available to the combined businesses.
Aimia’s core strengths lie in the manufacturing, sale and marketing of Aimia-owned and third party licensed beverage brands across all sectors of the U.K. market, including Foodservice, Vending, Cash & Carry and Retail.
Aimia has been highly successful in maintaining strong relationships with leading brand-owners and outsourcing partners, and we look forward to continuing to build these relationships under Aimia’s current leadership team.”
Rob Unsworth, Managing Director of Aimia Foods said: “We firmly believe that bringing Aimia Foods into the Cott family will provide additional opportunities for the benefit of our employees and customers alike. Our leadership team is excited to work with Cott to keep building on the strong foundation already established.”
Compelling Strategic Rationale
The transaction is intended to accelerate in both pace and scale Cott’s acquisition based diversification outside of carbonated soft drinks and shelf stable juices, with a focus on other beverage categories and beverage adjacencies, as well as on driving our channel mix beyond large format retail and supermarket stores.
- Enhances Product Diversification. Aimia provides access to growing higher value categories, with approximately 85% of Aimia’s revenues attributable to categories new to Cott, including hot chocolate, coffee, malt drinks, creamers/whiteners and cereals.
- Improves Channel Diversification. Aimia has a strong presence outside large format retail and supermarket stores, with approximately 40% of revenues in the wholesale, vending and foodservice channels and 35% of revenues from contract manufacturing.
- Expands Packaging Capabilities. Aimia provides new packaging formats, including pouches, jars, sticks, in-cup products, sachets and block-bottom bags.
- Enhances Operational Platform. The transaction brings together two best-in-class operators with a shared low-cost operational approach and scalable infrastructure, creating a stable platform for future expansion opportunities.
Financial Highlights
The combination is expected to be accretive to both earnings and free cash flow in the first year.
Cott also expects to realize incremental revenue growth opportunities based on its expanded product portfolio and broader channel diversification.
The year 2 post synergy adjusted EBITDA multiple is expected to be in the 5x to 6x range and the cash on cash IRR in the mid to high teens.
Source: press release
