Cott is diversifying away from the CSD category

Cott is diversifying away from the CSD category

Cott Corp has agreed a deal to acquire DSS Group, parent company of DS Services of America, for US$1.25bn as its looks to expand outside of CSDs and juices. 

The Canada and US-headquartered private label producer said yesterday it has entered an agreement to buy private equity-owned DSS, which is a direct-to-consumer provider of bottled water, office coffee and water filtration services. The deal, expected to close at the end of January, will bring Cott's annual net sales to around $3bn. 

DSS was acquired by private equity group Crestview Partners for an undisclosed sum in September last year

"This is a transformative milestone for Cott,” said the group's CEO, Jerry Fowden. “DSS will assist our continued efforts to migrate from a primarily CSD and shelf-stable juice beverage business to a diversified beverage provider with a strong platform on which to grow.” In May, Fowden said the US CSD market was in “structural decline” as Cott revealed it was targeting acquisitions away from the category

Last week, Cott reported that its nine-month net losses had widened to $9.5m

DSS will operate as a subsidiary of Cott, based in Atlanta, Georgia, once the deal completes. The company will continue to be led by Tom Harrington, DSS’s current CEO & president, as well as its current “leadership” team, Cott said. 

Jeff Marcus, DSS's chairman and a partner at Crestview, will serve on Cott's board of directors as an "observer".