Item 1.01.
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Entry into a Material Definitive Agreement.
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On January 30, 2020, Cott Corporation (Cott or the Company) entered into a Stock Purchase Agreement (the Purchase
Agreement) with Cott Holdings Inc., a wholly-owned subsidiary of Cott (Holdings), S. & D. Coffee, Inc., a wholly-owned subsidiary of Cott (S&D), and Westrock Coffee Company, LLC, a Delaware limited liability
company (Purchaser), pursuant to which Purchaser will acquire all of the issued and outstanding equity of S&D from Holdings.
The
aggregate deal consideration is $405 million, payable at closing in cash, subject to adjustments for indebtedness, working capital, and cash.
The
Purchase Agreement contains representations, warranties, covenants and conditions that the Company believes are customary for a transaction of this size and type. The representations and warranties of the parties do not survive the closing.
Purchaser has purchased a representation and warranty insurance policy, and after the closing the sole recourse of Purchaser for any breach of the representations and warranties in the Purchase Agreement, absent fraud, shall be against
such policy. The Purchase Agreement also provides for certain customary pre-closing covenants of S&D, including covenants relating to conducting its business in the ordinary course and refraining from
taking certain actions without the Purchasers consent. The Purchase Agreement also provides for certain post-closing covenants of the Company, including a covenant of the Company not to engage in activities that are competitive with the
divested business for four years after the closing, with certain exceptions for Cotts existing businesses.
The closing of the transaction is
subject to satisfaction of certain conditions, including receipt of U.S. regulatory clearance.
The transaction is not subject to any financing condition.
Purchaser has obtained equity commitments from parties affiliated with The Stephens Group, LLC and BBH Capital Partners as well as debt commitments in an aggregate amount sufficient to fund the purchase price.
The Purchase Agreement contains customary termination provisions. If the Purchase Agreement is terminated by the Company under specified circumstances,
Purchaser is required to pay a termination fee of $15 million to the Company.
The Company intends to use the proceeds of the transaction to finance a
portion of its previously disclosed acquisition of Primo Water Corporation (Primo), depending on the timing of closing, or otherwise to pay down indebtedness.
The foregoing summary of the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the
Purchase Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of the Purchase Agreement and
as of specific dates, were solely for the benefit of the parties to it, and may be subject to limitations agreed upon by the contracting parties. Accordingly, you should not rely on the representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or condition of the Company.
Item 7.01
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Regulation FD Disclosure
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On January 31, 2020, the Company issued a press release announcing the S&D transaction. A copy of the press release is furnished herewith under the
Securities Exchange Act of 1934, as amended, as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Additional Information and Where to Find It
This
communication relates to a pending business combination between Cott and Primo. Cott commenced an exchange offer for the outstanding shares of Primo on January 28, 2020. This communication is for informational purposes only and does not
constitute an offer to purchase or a solicitation of an offer to sell shares, nor is it a substitute for any offer materials that the parties will file with the U.S. Securities and Exchange Commission (the SEC). At the time the exchange
offer was commenced, Cott and its acquisition subsidiary filed an exchange offer statement on Schedule TO, Cott filed a registration statement on Form S-4 and Primo filed a Solicitation/Recommendation
Statement on Schedule 14D-9 with the SEC with respect to the exchange offer. Each of Cott and Primo also plan to file other relevant documents with the SEC regarding the proposed transaction. THE EXCHANGE
OFFER MATERIALS (INCLUDING THE OFFER TO EXCHANGE, THE RELATED LETTER OF ELECTON AND TRANSMITTAL AND CERTAIN OTHER EXCHANGE OFFER DOCUMENTS), THE SOLICITATION / RECOMMENDATION STATEMENT AND OTHER RELEVANT