US: Clearly Canadian sells Cascade water brand
Clearly Canadian Beverage Corp has sold its Cascade Clear water brand along with a bottling plant in Washington state for a total of about US$6.3m.
The deal between Clearly Canadian's American subsidiary, CC Beverage (US) Corp and Advanced H2O Inc, includes US$2.13m in cash, the assumption of CC Beverage's indebtedness of approximately US$2.15m and the assumption of certain capital equipment leases of approximately US$63,600.
The sale of the water brand amounts to US$2m, which will be paid to CC Beverage based on a percentage of the gross sales earned by AH2O over time, subject to a minimum payment of US$100,000 per year.
Under the agreement announced Wednesday, Advanced H2O also undertakes to provide CC Beverage with bottling services at cost for as many as 1.75 million cases of drinks per year, for up to 10 years.
In addition, AH2O has agreed to provide CC Beverage with at cost bottling services for 10 years for up to 1.5m cases per year of carbonated beverages and 250,000 cases per year of non-carbonated beverages.
In a statement CC Beverages said "The company intends to use the proceeds from the sale for general working capital purposes, to reduce debt and to provide additional financing for the marketing and distribution of its beverages, including the continued rollout of Reebok Fitness Water in the United States and Canada.
"Clearly Canadian made the strategic decision to divest of its subsidiary's production facility at this time to return to its core competencies - the marketing of premium alternative beverages," said Douglas Mason, president of Clearly Canadian.
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