Primo Water and BlueTriton Agree to Merge, Creating a Leading North American Pure-Play Healthy Hydration Company
Transformative all-stock transaction expected to present an estimated
Combined company expected to have significant financial and operating leverage with
Increased presence, leading portfolio of iconic brands, diversified product offerings and enhanced distribution capabilities position the combined company for sustained long-term growth
The Transaction offers a compelling strategic rationale and combines the complementary strengths of
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1
Adjusted EBITDA is defined as EBITDA adjusted for one-time and non-cash items including, but not limited to, acquisition and integration costs, share-based compensation costs, COVID-19 costs, impairment charges, foreign exchange and other losses, net, loss on disposal of property, plant and equipment, net, loss on extinguishment of long-term debt, (gain) loss on sale of business, (gain) loss on sale of property, and other adjustments, net. This is a non-GAAP financial measure. Combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the |
2
Special dividend per share calculated using fully diluted shares outstanding as of |
NewCo is expected to be dual headquartered in
BlueTriton is a North American beverage company with a portfolio of iconic national and regional water brands, including Poland Spring®,
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1
Adjusted EBITDA is defined as EBITDA adjusted for one-time and non-cash items. This is a non-GAAP financial measure. Combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the |
3
Excludes exited North American small-format retail and |
The Transaction will bring together
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1
Adjusted EBITDA is defined as EBITDA adjusted for one-time and non-cash items. This is a non-GAAP financial measure. Combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the |
The combined company will benefit from a diversified portfolio of iconic brands to provide high-quality service to consumers across product formats, channels, price points and usage occasions. It will have a leading healthy hydration brand portfolio complemented by the convenience of a sustainable delivery platform with extensive reach to serve millions of customers, leveraging technology to enhance customer experience, route design and continued carbon footprint reduction.
The Transaction is expected to present an estimated run-rate cost synergies opportunity of approximately
The combined company generated over
The Transaction was structured to allow NewCo to keep both
NewCo currently anticipates maintaining
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4
Adjusted Free Cash Flow is defined as net cash provided by operating activities less Capex adjusted for one-time items such as acquisition and integration cash costs, cash taxes on property sales, tariff refunds, and others. This is a non-GAAP financial measure. Combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the |
5
Normalized capital expenditure target is a management estimate based on review of historical and anticipated capital expenditures, excluding |
6
Net debt is defined as total debt less cash and cash equivalents. Net Debt and Net Debt/Adjusted EBITDA are non-GAAP financial measures. Combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the |
Under the terms of the agreement,
Under the terms of the definitive agreement, the Transaction will be effected by way of a court-approved plan of arrangement involving
The Transaction is subject to approval by
The directors and executive officers of
The definitive agreement permits
A copy of the arrangement agreement and plan of merger will be filed with the
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2
Special dividend per share calculated using fully diluted shares outstanding as of |
The combined company is expected to initially have a 15-person Board of Directors, 7 members of which will be initially appointed by
A question-and-answer session will follow management's presentation. To participate, please call the following numbers:
International: 1-416-764-8659
Conference ID: 68576339
This is a live, listen-only dial-in telephone line.
A slide presentation and live audio webcast will be available through Primo Water's website at www.primowatercorp.com. The conference call will be recorded and archived for playback on the investor relations section of the website.
BlueTriton also owns and operates ReadyRefresh®, a reuse and refill platform for home and office beverage delivery in
Headquartered in
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities legislation, including Section 27A of the
Factors that could cause actual results to differ materially from those described in this press release include, among others: (i) the ability of the parties to successfully complete the Transaction on anticipated terms and timing, including obtaining required shareholder and regulatory approvals and the satisfaction of other conditions to the completion of the Transaction, (ii) risks relating to the integration of
The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof.
Any combined financial information included in this press release is for illustrative purposes only and does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the
This press release contains certain non-GAAP financial measures and ratios, including Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt/Adjusted EBITDA and financial information presented on a last 12 months basis, which are not recognized by
Additionally, the reporting of net cash provided by (used in) operating activities from continuing operations determined in accordance with GAAP is supplemented by excluding certain items identified on the exhibits hereto to present Adjusted Free Cash Flow, which
With respect to the expectations of future performance, reconciliations of target net leverage ratios and normalized capital expenditure rates are not available, as the Company is unable to quantify certain amounts to the degree of precision that would be required in the relevant GAAP measures without unreasonable effort. These items include restructuring costs and debt extinguishment costs and other items and the income tax effects of these items and/or other income tax-related events.
The non-GAAP financial measures described above are in addition to, and not meant to be considered superior to, or a substitute for,
This communication is not intended to, and does not, constitute a proxy statement or solicitation of a proxy, consent, vote or authorization with respect to any securities or in respect of the Transaction and shall not constitute an offer to sell or exchange, or a solicitation of an offer to buy or exchange any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an exemption therefrom. In
This press release relates to the proposed Transaction between
Website: www.primowatercorp.com
(in millions of
Unaudited
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Combined |
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For the |
For the |
For the |
Last twelve |
|
For the year |
For the |
For the |
Last twelve |
|
Last twelve |
Revenue, net |
$ 1,771.8 |
$ 412.5 |
$ 452.0 |
$ 1,811.3 |
|
$ 4,698.7 |
$ 1,122.1 |
$ 1,135.8 |
$ 4,712.4 |
|
$ 6,523.7 |
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|
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_____________________________ |
1
Primo Water Corporation 2023 Form 10-K filed |
2
Primo Water Corporation Q1 2024 Form 10-Q filed |
3 LTM calculated as FY 2023 less Q1 2023 plus Q1 2024. |
4
|
5
|
(in millions of
Unaudited
|
|
|
|
|
Combined |
||||||||||||||
|
For the |
For the |
For the |
Last twelve |
|
For the year |
For the |
For the |
Last twelve |
|
Last twelve |
||||||||
Net income from |
$ 63.8 |
$ 3.2 |
$ 18.7 |
$ 79.3 |
|
$ 92.8 |
$ (6.1) |
$ 33.5 |
$ 132.4 |
|
$ 211.7 |
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Interest expense, net |
71.4 |
18.2 |
10.0 |
63.2 |
|
288.1 |
72.5 |
79.9 |
295.5 |
|
358.7 |
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Income tax expense |
27.0 |
0.3 |
9.5 |
36.2 |
|
25.1 |
(2.8) |
11.4 |
39.3 |
|
75.5 |
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Depreciation and |
193.3 |
47.1 |
48.2 |
194.4 |
|
305.7 |
61.7 |
75.2 |
319.2 |
|
513.6 |
||||||||
EBITDA |
$ 355.5 |
$ 68.8 |
$ 86.4 |
$ 373.1 |
|
$ 711.7 |
$ 125.3 |
$ 200.0 |
$ 786.4 |
|
$ 1,159.5 |
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Acquisition and integration |
9.5 |
1.7 |
5.3 |
13.1 |
|
22.0 |
6.4 |
1.7 |
17.3 |
|
30.4 |
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Share-based compensation |
14.1 |
2.0 |
3.0 |
15.1 |
|
1.3 |
0.3 |
0.3 |
1.3 |
|
16.4 |
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COVID-19 costs |
- |
- |
- |
- |
|
- |
- |
- |
- |
|
- |
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Foreign exchange and |
5.7 |
(0.2) |
(1.9) |
4.0 |
|
- |
- |
- |
- |
|
4.0 |
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Loss on disposal of |
9.1 |
1.3 |
1.5 |
9.3 |
|
11.4 |
- |
1.5 |
12.9 |
|
22.2 |
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Loss on extinguishment of |
- |
- |
- |
- |
|
- |
- |
- |
- |
|
- |
||||||||
Gain on sale of property |
(21.0) |
- |
(0.5) |
(21.5) |
|
- |
- |
- |
- |
|
(21.5) |
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Other adjustments, net |
7.8 |
2.0 |
0.1 |
5.9 |
|
37.2 |
12.6 |
14.1 |
38.7 |
|
44.6 |
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Adjusted EBITDA |
$ 380.7 |
$ 75.6 |
$ 93.9 |
$ 399.0 |
|
$ 783.6 |
$ 144.6 |
$ 217.6 |
$ 856.6 |
|
$ 1,255.6 |
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Run-Rate |
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$ 200.0 |
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Business |
|
$ 20.0 |
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Combined |
|
$ 1,475.6 |
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Combined Net |
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$ 6,523.7 |
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Combined |
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23 % |
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_____________________________ |
1
Primo Water Corporation 2023 Form 10-K filed |
2
Primo Water Corporation Q1 2024 Form 10-Q filed |
3 LTM calculated as FY 2023 less Q1 2023 plus Q1 2024. |
4
Amounts used to calculate EBITDA obtained from the |
5
Amounts used to calculate EBITDA obtained from the |
6 Company estimates. |
(in millions of
Unaudited
|
|
|
Combined |
|
For the fiscal year ended |
||
Net income from continuing operations |
$ 4.9 |
$ (309.7) |
$ (304.8) |
Interest expense, net |
68.3 |
125.5 |
193.8 |
Income tax expense |
7.7 |
(92.6) |
(84.9) |
Depreciation and amortization |
160.2 |
438.5 |
598.7 |
EBITDA |
$ 241.1 |
$ 161.7 |
$ 402.8 |
Acquisition and integration costs |
9.1 |
141.4 |
150.5 |
Share-based compensation costs |
15.5 |
- |
15.5 |
COVID-19 costs |
2.0 |
11.7 |
13.7 |
Foreign exchange and other (gains), net |
(0.5) |
- |
(0.5) |
Loss on disposal of property, plant and |
9.1 |
- |
9.1 |
Loss on extinguishment of long-term |
27.2 |
- |
27.2 |
Gain on sale of property |
- |
- |
- |
Other adjustments, net |
0.8 |
215.7 |
216.5 |
Adjusted EBITDA |
$ 304.3 |
$ 530.5 |
$ 834.8 |
|
|
|
|
LTM Q1 2024 Adjusted EBITDA |
$ 399.0 |
$ 856.6 |
|
2021 – LTM Q1'24 |
13 % |
24 % |
|
|
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|
|
_____________________________ |
1
Primo Water Corporation 2023 Form 10-K filed |
2
Amounts used to calculate EBITDA obtained from the |
(in millions of
Unaudited
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Combined |
|||||||||||||||
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For the |
For the |
For the |
Last twelve |
|
For the year |
For the |
For the |
Last twelve |
|
Last twelve |
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Net cash provided by |
$ 289.2 |
$ 30.3 |
$ 63.4 |
$ 322.3 |
|
$ 320.9 |
$ (56.4) |
$ 6.0 |
$ 383.3 |
|
$ 705.6 |
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Less: Additions to |
(139.2) |
(42.2) |
(37.6) |
(134.6) |
|
(203.6) |
(40.4) |
(23.5) |
(186.7) |
|
(321.3) |
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Less: Additions to |
(8.5) |
(2.0) |
(2.3) |
(8.8) |
|
(14.1) |
(4.4) |
(21.2) |
(30.9) |
|
(39.7) |
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Free Cash Flow |
$ 141.5 |
$ (13.9) |
$ 23.5 |
$ 178.9 |
|
$ 103.2 |
$ (101.2) |
$ (38.7) |
$ 165.7 |
|
$ 344.6 |
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Acquisition and integration |
7.0 |
2.5 |
2.4 |
6.9 |
|
22.0 |
6.4 |
1.7 |
17.3 |
|
24.2 |
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Cash taxes paid for |
5.9 |
- |
- |
5.9 |
|
- |
- |
- |
- |
|
5.9 |
|||||||||
Cash costs related to |
0.3 |
- |
0.4 |
0.7 |
|
- |
- |
- |
- |
|
0.7 |
|||||||||
Management Fees |
- |
- |
- |
- |
|
17.8 |
3.9 |
9.3 |
23.2 |
|
23.2 |
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Tariffs refunds related to |
3.1 |
0.4 |
2.1 |
4.8 |
|
- |
- |
- |
- |
|
4.8 |
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Adjusted Free Cash Flow |
$ 157.8 |
$ (11.0) |
$ 28.4 |
$ 197.2 |
|
$ 143.0 |
$ (90.9) |
$ (27.7) |
$ 206.2 |
|
$ 403.4 |
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Run-Rate |
|
$ 148.8 |
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|
Business |
|
$ 14.9 |
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Adjusted |
|
$ 567.1 |
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_____________________________ |
1
Primo Water Corporation Form 8-K filed |
2
Primo Water Corporation Form 8-K filed |
3 LTM calculated as FY 2023 less Q1 2023 plus Q1 2024. |
4
Amounts used to calculate Free Cash Flow obtained from the |
5
Amounts used to calculate Free Cash Flow obtained from the |
6 Company estimates. Tax-effected at 25.6%. |
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