Primo Water Corp, the Tampa-based international water company, says in a Thursday news release that it sold a significant part of its international operations to Culligan International for $575 million.
And while Primo says the deal excludes Aimia Foods, and businesses in the United Kingdom, Portugal and Israel, "each of these will be sold across 2024."
Primo CEO Tom Harrington says the deal will allow the Tampa business to focus on North America.
"Looking ahead, we will be laser-focused on growing the North American business, increasing our profitability and margins, enhancing our balance sheet strength, and returning capital to shareowners," says Harrington.
Primo officials went on to say that the sale "marks another major milestone in Primo Water's transformation as a company. Following the completion of the transaction, the simplified, proforma Primo Water will have greater focus on its pure-play North American water business, where it enjoys national and local scale, and is one of the leading players."
The sale will also improve its financial profile, "accelerating the achievement of several previously announced 2024 targets, including improvements in adjusted gross margins."
Primo Water is a water solutions provider in North America and Europe and generated approximately $2.2 billion in annual revenue in 2022.
Primo says it operates largely under a recurring revenue model in the large-format water category, defined as 3 gallons or greater. This business strategy is commonly referred to as "razor-razorblade," because the initial sale of a product creates a base of users who frequently purchase complementary consumable products, Primo says. Primo's main revenue is from water dispensers, which are sold through approximately 10,800 retail locations and online.