TORONTO, ONTARIO and TAMPA, FLORIDA--(June 21, 2016) - Cott Corporation (NYSE:COT)(TSX:BCB) ("Cott" or the "Company") today announced that it has entered into an agreement pursuant to which a syndicate of underwriters led by CIBC Capital Markets ("CIBC") has agreed to purchase, on a bought deal basis, 13,120,000 common shares (15,088,000 common shares if the over-allotment described below is exercised in full) at a price of US$15.25 per share for gross proceeds to Cott of approximately US$200 million (US$230 million if the over-allotment option is exercised in full). Cott has also granted the underwriters an option to purchase up to 1,968,000 additional common shares on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of this offering.
Cott will use a portion of the net proceeds of the offering to repay in full the borrowings under its asset based lending facility, which may be redrawn, from time to time, to finance potential acquisitions and for general corporate purposes. The remainder of the net proceeds will be used by the Company to finance potential acquisitions and for general corporate purposes.
This offering is subject to customary closing conditions, including the approval of the Toronto Stock Exchange and the New York Stock Exchange, and is expected to close on June 29, 2016.
The common shares will be offered in the United States by way of a prospectus supplement to the Company's effective shelf registration statement dated May 26, 2015, filed with the U.S. Securities and Exchange Commission (the "SEC"), and in each of the Provinces of Canada, except Québec, by way of a prospectus supplement to the Company's short form base shelf prospectus dated May 19, 2015, as amended by amendment no. 1 dated January 22, 2016 and amendment no. 2 dated May 27, 2016, filed with the securities regulatory authorities in each of the Provinces of Canada except Québec. Offers and sales of the common shares will be made only by the applicable base shelf prospectus and related prospectus supplement to be filed with the SEC and in Canada on the SEDAR website located at www.sedar.com, which will describe the terms of this offering.
A copy of the U.S. prospectus supplement and accompanying base shelf prospectus relating to this offering may be obtained, when available, from CIBC by email at email@example.com, telephone at 1-800-282-0822 or by mail from CIBC Capital Markets, 425 Lexington Avenue, 5th floor, New York, NY: Attention: Hector Cruz; and a copy of the Canadian prospectus supplement and accompanying short form base shelf prospectus, as amended by amendment no. 1 and amendment no. 2, related to the offering of common shares may be obtained, when available, from CIBC by email at firstname.lastname@example.org, telephone at 416-956-3636 or by mail from CIBC World Markets Inc., 22 Front Street West, Mailroom, Toronto, ON, M5J 2W5: Attention: Michelene Dougherty.
This press release does not constitute an offer to sell or a solicitation of an offer to buy and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
ABOUT COTT CORPORATION
With the acquisition of DS Services of America, Inc. in December 2014, Cott combined a leading provider in the direct-to-consumer beverage services industry with its traditional business, one of the world's largest producers of beverages on behalf of retailers, brand owners and distributors. Cott now 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. Cott reaches over 1.5 million customers (approximately 60% commercial and 40% residential) through over 2,000 routes located across our national network supported by national sales and distribution facilities, as well as a fleet of over 2,000 vehicles. 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, which enables it to efficiently service residences and small and medium size businesses, as well as national corporations, universities and government agencies.
Safe Harbor Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and forward-looking information within the meaning of applicable Canadian securities law (collectively, "forward-looking statements") conveying management's expectations as to the future based on plans, estimates and projections at the time Cott makes the statements. Forward-looking statements involve inherent risks and uncertainties and Cott cautions you that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statement. The forward-looking statements contained in this press release include, but are not limited to, statements related to completion of the common share offering, the anticipated closing date of the common share offering and the Company's intended use of proceeds of the offering. The forward-looking statements are based on assumptions regarding management's current plans and estimates, including, without limitation, the assumption that Cott will satisfy all conditions to completion of the common share offering. Management believes these assumptions to be reasonable but there is no assurance that they will prove to be accurate.
Factors that could cause actual results to differ materially from those described in this press release include, among others: our ability to compete successfully in the markets in which we operate; changes in consumer tastes and preferences for existing products and our ability to develop and timely launch new products that appeal to such changing consumer tastes and preferences; a loss of or a reduction in business in our legacy Cott business with key customers, particularly Walmart; consolidation of retail customers; fluctuations in commodity prices and our ability to pass on increased costs to our customers, and the impact of those increased prices on our volumes; our ability to manage our operations successfully; our ability to fully realize the potential benefit of acquisitions or other strategic opportunities that we pursue; our ability to realize the expected benefits of the previously announced acquisition of Hydra Dutch Holdings 1 B.V. (the "Eden Acquisition"), recent acquisitions or other strategic opportunities that we may pursue because of integration difficulties and other challenges; the limited nature of our indemnification rights under the DS Services acquisition agreement; the incurrence of substantial indebtedness to finance the DS Services acquisition; our exposure to intangible asset risk; currency fluctuations that adversely affect the exchange rates between the U.S. dollar and the British pound sterling, the Euro, the Canadian dollar, the Mexican peso and other currencies; our ability to maintain favorable arrangements and relationships with our suppliers; our substantial indebtedness and our ability to meet our obligations under our debt agreements, and risks of further increases to our indebtedness; our ability to maintain compliance with the covenants and conditions under our debt agreements; fluctuations in interest rates, which could increase our borrowing costs; credit rating changes;
the impact of global financial events on our financial results; our ability to fully realize the expected cost savings and/or operating efficiencies from our restructuring activities; any disruption to production at our beverage concentrates or other manufacturing facilities; our ability to maintain access to our water sources; our ability to adequately address the challenges and risks associated with our international operations and acquisition strategy and address difficulties in complying with laws and regulations including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010; our ability to protect our intellectual property; compliance with product health and safety standards; liability for injury or illness caused by the consumption of contaminated products; liability and damage to our reputation as a result of litigation or legal proceedings; changes in the legal and regulatory environment in which we operate; the impact of proposed taxes on soda and other sugary drinks; enforcement of compliance with the Ontario Environmental Protection Act; the seasonal nature of our business and the effect of adverse weather conditions; the impact of national, regional and global events, including those of a political, economic, business and competitive nature; our ability to recruit, retain, and integrate new management; our ability to renew our collective bargaining agreements on satisfactory terms; disruptions in our information systems; our ability to securely maintain our customers' confidential or credit card information, or other private data relating to our employees or our company; our ability to use net operating losses to offset future taxable income; whether we continue to pay a quarterly dividend; consummation of the Eden Acquisition, including receipt of the necessary regulatory approvals and financing (on currently anticipated terms); the time necessary to satisfy the conditions to the closing of the Eden Acquisition or the potential impact the Eden Acquisition will have on our future financial and operating trends and results.
The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in Cott's Annual Report on Form 10-K, its quarterly reports on Form 10-Q, as well as other periodic reports filed with the SEC, including its registration statement dated May 26, 2015 filed with the SEC, and its Canadian base shelf prospectus dated May 19, 2015, as amended by amendment no. 1 dated January 22, 2016 and amendment no. 2 dated May 27, 2016, filed on www.sedar.com, as well as other filings with the securities commissions or similar regulatory authorities in Canada and in the United States. These forward-looking statements are made only as of the date of this press release and Cott does not undertake to update or revise any of these statements in light of new information, future events or otherwise, except as expressly required by applicable law.