Cott Corp., Tampa, Fla., continues its transition into a pure-play water solutions provider with its announcement that it has entered into a definitive agreement pursuant to which Cott will sell S&D Coffee and Tea to Westrock Coffee Co. LLC for $405 million on a debt free and cash free basis, subject to a customary working capital adjustment, it says.
Providing quality beverages since 1927, S&D is a U.S. market leader in custom coffee roasting and the largest blender of iced teas for foodservice and convenience stores in the United States, it says. S&D also is a leader in the high growth category of extracts and ingredients.
"The S&D team is known for its dedication, hard work and passion for quality beverages and first-class service to its customers. That commitment is evident to anyone who visits S&D or works with them, and we are confident S&D will continue to thrive under its new ownership," said Tom Harrington, Cott's chief executive officer, in a statement. "The combination of the sale of S&D, along with the recent announcement of Cott's acquisition of Primo Water Corp., positions Cott to be a pure-play water solutions provider with financial metrics more in line with our water peers.”
The transaction is expected to close in the first quarter of 2020 and is subject to certain customary closing conditions including regulatory approval. In conjunction with the transaction, BBH Capital Partners, a private equity strategy of Brown Brothers Harriman & Co., will provide acquisition capital alongside Westrock Coffee's existing investors, including The Stephens Group LLC.
BMO Capital Markets Corp. acted as exclusive financial adviser to Cott while Drinker Biddle & Reath LLP acted as legal advisor. Wachtell, Lipton, Rosen & Katz acted as legal adviser to Westrock Coffee.