Primo Water acquires Glacier Water Services $263M in cash, stock
Primo Water and Glacier Water Services announced that they have executed a definitive merger agreement pursuant to which Primo will acquire all outstanding shares of Glacier. With the strategic acquisition, Primo will have approximately 46,000 retail locations throughout the U.S. and Canada. The transaction will unite two highly complementary brands and is intended to generate significant operating scale through an expansive refill and exchange network. Additionally, the acquisition will drive future cross-selling opportunities, significant cost savings and consistent cash flows. On a pro forma trailing twelve months basis ended June 30, 2016, the acquisition creates a combined company with approximately $272.6M in net sales, $14.3M in income from operations and $45.4M in adjusted EBITDA. The acquisition will provide retail partners and consumers a diversified, high-quality water and water dispenser offering. For consumers, the combination will provide access to purely amazing water throughout leading U.S. and Canadian retailers, almost doubling Primo's existing location total. The total preliminary transaction consideration is approximately $263M , consisting of approximately $50M in cash, approximately $36M in Primo common stock, approximately $177M of net indebtedness and preferred stock being assumed or retired, and five-year warrants to purchase 2.0M shares of Primo's common stock at an exercise price of $11.88 per share, subject to adjustments based on any increases in Glacier's debt and certain transaction expenses. The assumed indebtedness includes Glacier's trust preferred securities due in 2028, which will remain outstanding and will not be affected by the transaction. The acquisition agreement has been unanimously approved by the Board of Directors of both companies. The transaction is expected to close in late 2016, subject to customary closing conditions.