Cott Corp. (NYSE: COT) (TSX: BCB) has agreed to acquire Eden Springs for EUR 470 million ($534.3 million) from New York-based private equity firm Rhône Capital. Eden Springs is a leading European and Israeli provider of home and office water coolers and coffee machines, services and solutions.
The purchase price represents a mid 7x multiple of Eden’s 2016 EBITDA of EUR 60 million ($68,2 million). In January 2103, Rhone Capital had acquired the European and Israeli Mey Eden operations of Mayanot Eden, best known for its Eden Springs office watercooler brand, for 70 million euros ($93.4 million), at an enterprise value of 240 million euros including 170 million in debt.
Eden generated over EUR 360 million in pro forma revenues during 2015. The acquisition broadens the distribution platform of Cott’s existing UK/European business by providing access to a direct-to-consumer route distribution platform in Europe serving over 800,000 homes and offices. The acquisition is expected to be accretive to adjusted free cash flows in its first full year and provide a cash on cash IRR above its cost of equity.
The deal comes a few months after an investor group led by German billionaire Reimann family’s JAB Holding Co. closed the $13.9 billion acquisition of Vermont-based Keurig Green Mountain Inc., a leader in single-serve coffee and beverage technologies, in March 2016.
“The Eden Springs acquisition is another great step in our stated strategy to pursue opportunities in the higher margin home and office water delivery, office coffee and tea services and filtration categories where we believe our platform, operating strength and synergies can be leveraged,” commented Jerry Fowden, Cott’s CEO.
Raanan Zilberman, Eden’s CEO, commented, “Eden is a successful business and a natural fit with the wider Cott family. This transaction is an important step as we strengthen our international capability and develop our market-leading position.”
The acquisition is expected to close in the third quarter of 2016, subject to customary closing conditions.
Evercore acted as financial advisor to Cott along with Deutsche Bank Securities Inc., JP Morgan and Wells Fargo who also provided unsecured committed financing. Cott ultimately intends to finance the transaction through a combination of incremental borrowings under its ABL facility and a new debt issuance of unsecured notes.
Cott has the largest volume-based national presence in the U.S. home and office delivery industry for bottled water and one of the five largest national market share positions in the U.S. office coffee services and filtration services industries. The company reaches over 1.5 million customers (approximately 60% commercial and 40% residential) through over 2,000 routes located across its national network supported by national sales and distribution facilities, as well as a fleet of over 2,000 vehicles. Cott was founded in 1955 and is based in Tampa, Florida.
Cott’s broad portfolio allows it to offer on a direct-to-consumer basis a variety of bottled water, coffee, brewed tea, water dispensers, coffee and tea brewers and filtration equipment. With the ability to cover approximately 90% of U.S. households, in terms of geography, Cott believes it has the broadest distribution network in the direct-to-consumer beverage services industry in the United States.
Eden Springs is a leading provider of water and coffee solutions for offices in Europe. Headquartered in Switzerland, Eden provides a high-level service to over 800,000 offices and homes throughout 18 countries.
Eden Springs offers a variety of integrated water and coffee solutions designed to cater to a wide range of tastes and requirements of a diverse customer base. Solutions include a broad range of bottle-fed water coolers, plumbed-in water coolers and small pack bottles as well as hot beverages solutions including coffee machines, high quality coffee, tea and other accessories.
Eden has more than 3,200 employees and manages a distribution network across Europe, including production facilities, a fleet and local water sources. The scale of operations was achieved through a combination of business entrepreneurship, market expansion, operational excellence, and acquisitions of varying sizes.
Rhône Group is a global private equity firm, specializing in mergers and acquisitions, leveraged buyouts, recapitalizations, and partnerships with particular focus on European and trans-Atlantic investments. Rhone Capital LLC is the private equity arm of the firm, which also offers financial advisory services, strategic alliances, joint partnerships, and business valuation services. The firm tends to invest in energy, materials, industrials, retailing, consumer staples, healthcare, and financial sectors. Rhône is headquartered in New York City, with an additional office in London. Rhône was founded in 1995 by Robert Agostinelli and Steven Langman, who have been managing the firm since inception. Prior to Rhone, they both served in senior management positions at Lazard Frêres.