Cott To Buy DSS Group Fpr $1.25 Bln

(RTTNews) - Canadian beverage maker Cott Corp. (BCB.TO, COT) said Thursday that it has agreed to buy DSS Group, Inc., the parent company of DS Services of America, Inc., a water and coffee direct-to-consumer services provider in the United States, for about $1.25 billion, including the assumption of debt and the issuance of preferred shares to Crestview Partners and other selling shareholders.

The acquisition is expected to close by the end of January. Cott has received committed financing from Barclays and Credit Suisse to support the deal.

Cott plans to continue with its quarterly dividend but will suspend its stock buyback program in connection with the deal.

Cott said the acquisition will extend its beverage portfolio into new and growing markets, including water and coffee home and office delivery services, water filtration services, and retail services, while creating cost synergies as well as portfolio expansion. The acquisition is also expected to enhance the company's overall margin profile.

Following the acquisition, DSS will operate as a subsidiary of Cott, based in Atlanta, Georgia, and will continue to be led by its current CEO Tom Harrington as well as its present leadership team.

Once the deal closes, Cott will have pro forma net sales of about $3 billion for the twelve months ended September 27, 2014.

Cott expects the acquisition to be accretive to adjusted free cash flow per share in the first year.

Cott's U.S.-listed shares are currently trading at $6.77, up 71 cents or 11.72%. On the TSX, Cott shares are currently trading at C$7,79, up 88 cents or 12.74%.