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TAMPA — Cott Corp. has reached an agreement to buy the parent company of Atlanta-based bottled water, office coffee and water filtration services company DS Services Holdings Inc. for $1.25 billion. The deal also calls for Cott to assume DSS Group Inc.'s debit and issue preferred shares to Crestview Partners and other selling shareholders.
According to the announcement, the purchase will extend Cott's beverage portfolio into new and growing markets, broaden its distribution to include direct to consumers and offer cost savings. It will also help Cott diversify away from carbonated soft drinks and unrefrigerated juices while offering it a higher-margin beverage line.
Upon completion of the acquisition, DSS Group will operate as a subsidiary of Cott, based in Atlanta. The subsidiary will continue to be led by Tom Harrington, DSS Group's current CEO and president and the company's existing leadership team.
The acquisition is expected to close by the end of January.
The combine company is expected to save Cott $25 million a year by the end of 2017.
Jeff Marcus, DSS Group's chairman and a partner at Crestview, will serve on Cott's board of directors as an observer.
Credit Suisse acted as financial adviser to Cott on the DSS Group transaction. Drinker Biddle & Reath LLP acted as legal adviser.
Cott, which is based in Mississauga, Ontario, and Tampa, is one of the world's largest producers of beverages on behalf of retailers, brand owners and distributors.
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