Primo Water Corporation (NASDAQ: PRMW), leading provider of water dispensers, purified bottled water, and self-service refill drinking water in the U.S. and Canada, stock surged 25.43% on 13th January, 2020 (Source: Google finance) after Cott Corporation signed a definitive agreement pursuant to which Cott will acquire Primo Water Corporation for $14.00 per share payable in cash and stock (or a combination thereof) at the election of Primo’s stockholders, which is subject to the terms of the merger agreement. This will be comprised of $5.04 in cash and 0.6549 shares of Cott. Shareholders can elect to instead receive $14 in cash or 1.0229 shares of Cott. The transaction, which values Primo at approximately $775 million, was unanimously approved by both the Cott and Primo Boards of Directors.
Cott will have to pay a total of approximately $216 million in cash to Primo stockholders, which will be funded with the proceeds of a new term debt issuance or proceeds from the sale of S&D Coffee and Tea, and issue approximately 26.8 million new shares to Primo stockholders. Cott has already obtained financing commitments of up to $400 million from an affiliate of Deutsche Bank Securities Inc. to underpin the payment of the acquisition price and the refinancing of Primo’s debt. The transaction is anticipated to close in March 2020, which is subject to the conditions to the exchange offer and other customary closing conditions. Deutsche Bank Securities Inc. is as financial advisor to Cott and Drinker Biddle & Reath LLP and Goodmans LLP provided legal counsel to Cott. Goldman Sachs is a financial advisor to Primo and K&L Gates LLP provided legal counsel to Primo.
On the other hand, for the full year 2019, the Company expects net sales to be in the range of $312 million to $316 million and adjusted EBITDA is expected to be in the range of $50 million to $52 million for the full year, which is based on its third quarter results and trends and continued investment in promotional activities for the fourth quarter. For the fourth quarter of 2019, the Company expects net sales to be in the range of $75.7 million to $79.7 million and adjusted EBITDA is expected to be in the range of $11.5 million to $13.5 million.
For the third quarter, the company had reported adjusted net income of $4.3 million compared to adjusted net income of $7.5 million for the prior year quarter.