A few weeks after settling a lawsuit over a board of directors dispute, Tampa-based Primo Water Corp. and one of the bottled water products and services company’s investors, Legion Partners Holdings, have reached another agreement.
In this one, Primo will appoint a pair of new independent directors nominated by Legion: Derek Lewis and Lori Tauber Marcus. Both former executives for PepsiCo, Lewis and Marcus, according to a statement, joined the Primo board May 3 and were nominated for election to a term on the board at the company’s special meeting of shareowners, scheduled for May 31. In addition, Primo has agreed to adopt certain corporate governance enhancements, “including changes to its advance notice bylaw provisions,” the release states.
The initial dispute was sparked by Primo’s decision to block the board nominations of Henrik Jelert and Marcus, two of four people Legion had nominated for seats on the company’s board. Legion officials, in letters to the company, public statements and interviews with the Business Observer, had previously said it sought a change at Primo due to its “perpetual underperformance — over several time periods — relative to its various peer groups, the Russell 2000 Index and the S&P 500 Index.”
The dispute made its way to a lawsuit, filed in Ontario, Canada, that was settled April 16. (Primo’s shares are traded on the NYSE and the Toronto Stock Exchange.)
“We are pleased to have reached this amicable agreement with Legion," Primo Chairman Jerry Fowden says in the new release, issued May 3, regarding Lewis and Marcus. "We welcome Derek and Lori to our board and look forward to working together towards our common goal of enhancing value for our customers, shareowners and other stakeholders. On behalf of the board, I would also like to thank Greg Monahan and Eric Rosenfeld, who will not stand for re-election at the Annual Meeting, for their enormous contribution to Primo Water over the past 15 years. We are grateful for their dedicated service and wish them the very best in all their future endeavors."
In connection with the appointment of these two new directors, Legion has withdrawn its notice of intention to nominate candidates for election at the Annual Meeting and has agreed to customary standstill and voting commitments, the release states. Legion has also agreed not to pursue its complaints to the Ontario Securities Commission and the Toronto Stock exchange in connection with the annual meeting.
"We are pleased to have reached this constructive agreement with Primo Water," Chris Kiper, Managing Director of Legion Partners says in the statement. "Legion believes that Primo Water has a significant opportunity to generate profitable growth and substantial value for shareowners, and Derek and Lori bring deep and relevant experience that will help the Company achieve this goal."
Via brands such as AquaTerra, PureFlo and Mountain Valley Spring Water, Primo is a leading provider of water and related products — what it calls hydration solutions — throughout North America, Europe and Israel, manufacturing water dispensers and delivering bottled water to millions of homes and businesses. According to its website, Primo sells more than one billion gallons of water every year. It reported gross revenue of $2.07 billion in 2022, up from $1.95 billion in 2021 — an increase of more than 6%, though it posted a loss of $3.2 million.