Cott Acquires Canadas Aquaterra Water Delivery And Office Coffee Businesses For 47 Million

TAMPA, FL -- Cott Corp. said it has entered into a definitive share purchase agreement to acquire Aquaterra, Canada's oldest and largest direct-to-consumer water delivery and office coffee service businesses for $47 million. The acquisition is expected to close in January.

Aquaterra provides well-known Canadian brands such as Canadian Springs and Labrador Springs. In addition to water delivery to homes and offices and OCS, it provides water filtration. Its acquisition broadens the distribution platform of Cott's existing Canadian business by adding a national direct-to-consumer route distribution fleet in Canada with about 70,000 customers.

Aquaterra continues Cott's diversification outside of carbonated soft drinks, shelf-stable juices and large-format retail, and marks its entry into the Canadian market.

"The Aquaterra acquisition is another great step in our stated strategy to consolidate the higher margin home and office water delivery and coffee services categories where we believe our platform, operating strength and synergies can be leveraged," said Cott chief executive Jerry Fowden.

The combination is expected to be accretive to free cash flow in the first year and will be funded using Cott's asset based lending facility.

Once integration is complete, Cott expects growth from an expanded product portfolio, broader channel penetration and increased Web-based customer acquisition. Aquaterra's financial performance is expected to benefit from procurement and operational synergies by leveraging Cott's and DS Services' existing operations in North America.

Tom Harrington, chief executive of DS Services, commented, "We are very excited about expanding our business into the Canadian market and firmly believe that our established partnerships and home and office water and coffee delivery expertise will create an even stronger, growth and service oriented platform at Aquaterra. In addition, we expect to continue to capitalize on our expertise in the area of consolidating very fragmented home and office bottled water and coffee service markets."

Cott is a leading producer of beverages on behalf of retailers, brand owners and distributors. It also has one of the broadest home and office bottled water and office coffee service distribution networks in the United States. Its DS Services division provides bottled water, office coffee and water filtration services to approximately 1.5 million customer locations through its network of over 180 warehouse, branch and distribution facilities and daily operation of over 2,200 routes, according to the company.