US: Cott Corp to acquire Cliffstar Corp
Cliffstar is a supplier of private label juices in North America
Cott Corporation has lined up the purchase of privately-held juice maker Cliffstar Corp. for US$500m.
The soft drinks firm confirmed yesterday (7 July) that the transaction “combines the number one private-label carbonated soft drink and number one private-label juice manufacturers".
As well as the $500m, Cott will also pay $14m to Cliffstar in deferred consideration over a three-year period, while also offering the company an "additional contingent earnout consideration" of up to $55m, dependent on its performance up to the end of this year.
Cott subsequently expects a cash tax benefit from the transaction in the region of $75m.
“Cliffstar is an ideal partner for Cott as we strengthen our position in private label beverages," said Cott's CEO, Jerry Fowden.
“A combination with Cliffstar expands Cott's product portfolio and manufacturing capabilities, enhances our customer offering and growth prospects, and improves our strategic platform for the future. Combined with Cliffstar, Cott will be a more diversified company with long-term advantages for our shareowners and retailer partners.”
Based in New York, Cliffstar operates 11 facilities in the US, including five bottling and distribution operations, three fruit processing facilities, two fruit receiving stations and one storage facility. It employs around 1,200 staff.
Cott also released earnings guidance for its second quarter yesterday. The firm said it estimates consolidated sales of $426m and operating income of $37m for the three-month period, with volumes to come in at 207m cases.
“Overall I am pleased with the preliminary results of our second quarter performance, given the quarter saw a significant increase in much-publicised national brand promotional activity," Fowden said.
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