Primo Water Corp., Tampa, Fla., and an affiliate of BlueTriton Brands Inc., Stamford, Conn., announced the entry into a definitive agreement to create a leading North American pure-play healthy hydration company in an all-stock transaction that was unanimously approved by their respective Boards of Directors. Upon closing of the transaction, Primo Water shareholders and holders of incentive equity are expected to own 43% of the fully diluted shares of the combined company, NewCo, and BlueTriton shareholders are expected to own 57% of the fully diluted shares of NewCo.

The transaction offers a compelling strategic rationale and combines the complementary strengths of Primo Water and BlueTriton, creating a North American leader in pure-play healthy hydration with diversified offerings across products, formats, channels and consumer occasions, the companies say. The combined company will have significant financial and operating presence with combined net revenue and adjusted EBITDA, inclusive of $200 million in estimated cost synergies, of $6.5 billion and $1.5 billion, respectively, for the 12 month period ended March 31, 2024.

NewCo is expected to be dual headquartered in Tampa, Fla., and Stamford, Conn. Dean Metropoulos, the current Chairman of the Board of BlueTriton, will serve as Non-Executive Chairman of the Board of the combined company. Upon close, Robbert Rietbroek, the current CEO of Primo Water, will serve as CEO, David Hass, the current chief financial officer (CFO) of Primo Water, will serve as CFO, and Rob Austin, the current chief operating officer (COO) of BlueTriton, will serve as COO.

Primo Water is a leading North America-focused, branded pure-play water solutions company with a broad portfolio of sustainable hydration brands operating primarily in the large format water category. Primo Water’s water solutions expand consumer access to purified and spring water to promote a healthier, more sustainable lifestyle. Primo Water’s brands include Primo Water, Mountain Valley, Crystal Springs, Sparkletts and Alhambra, amongst others. Primo Waters net revenue from continuing operations grew from $1.4 billion in 2021 to $1.8 billion during the 12-month period ended March 31, 2024, a compounded annual growth rate of 11%. Adjusted EBITDA grew from $304 million to $399 million over that same period, a compounded annual growth rate of 13%.

BlueTriton is a North American beverage company with a portfolio of iconic national and regional water brands, including Poland Spring, Deer Park, Ozarka, Ice Mountain, Zephyrhills, Arrowhead, Saratoga and Pure Life. Through its ReadyRefresh business in the United States, BlueTriton also serves the home and office beverage delivery segment with a portfolio of water brands. BlueTriton was acquired in February 2021 by an affiliate of One Rock Capital Partners, in partnership with Metropoulos & Co. Since the acquisition, BlueTriton’s net revenue grew from $3.9 billion in 2021 to $4.7 billion during the 12-month period ended March 31, 2024, a compounded annual growth rate of 9%. Adjusted EBITDA grew from $531 million to $857 million over that same period, a compounded annual growth rate of 24%.

“We are excited to combine Primo Water with BlueTriton to create a leading North American pure-play healthy hydration company,” Rietbroek said in a statement. “The transaction is expected to deliver significant value to our shareholders along with the opportunity to participate in the long-term upside potential of the combined company, which will build upon and complement our existing healthy hydration platform. The combined company will benefit from a diversified portfolio of iconic brands, a national footprint and the strength of the combined delivery platform to better serve customers anywhere and anyway they hydrate. Under the stewardship of One Rock and Metropoulos & Co., BlueTriton delivered net revenue growth and increased profitability for both its retail brands and ReadyRefresh.”

Joey Bergstein, CEO of BlueTriton, added: “The combination of BlueTriton and Primo Water enables our iconic, trusted brands, many with over 100 years of rich heritage, to further expand distribution and reach a broader base of customers with healthy hydration solutions. With greater presence, we also believe that we will have greater ability to positively impact our communities, invest in water stewardship, and bring circular packaging and refillable options to more people in more places. Thanks to the hard work and dedication of our team, our business has experienced strong momentum leading us to this exciting combination and a bright future with many opportunities for continued growth. I look forward to working together with the Primo Water team to make this transaction a success for all of our stakeholders.”

Metropoulos, incoming Chairman of NewCo, added: “Today’s announcement marks an important milestone for the North American beverage category with the creation of a new, leading healthy hydration platform. The increased presence, diversified product portfolio, focus on free cash flow generation, strong balance sheet and estimated cost synergies provide the foundation for long-term value creation for our shareholders.”

The transaction will bring together Primo Water and BlueTriton’s complementary strengths, creating a leader in North American pure-play healthy hydration with combined net revenue and adjusted EBITDA, including $200 million in estimated cost synergies of $6.5 billion and $1.5 billion, respectively, for the 12 month period ended March 31, 2024. One-time costs associated in the capture of the $200 million synergies opportunity are estimated to be approximately $115 million.

The combined company will benefit from a diversified portfolio of iconic brands to provide high-quality service to consumers across product formats, channels, price points and usage occasions. It will have a leading healthy hydration brand portfolio complemented by the convenience of a sustainable delivery platform with extensive reach to serve millions of customers, leveraging technology to enhance customer experience, route design and continued carbon footprint reduction.

The transaction is expected to present an estimated run-rate cost synergies opportunity of approximately $200 million, which the companies estimate will be fully realized within three years following the closing of the transaction.

Under the terms of the agreement, Primo Water and BlueTriton shareholders will exchange their respective shares into shares of a new holding company. Upon closing of the transaction, Primo Water shareholders and holders of incentive equity are expected to own 43% of the fully diluted shares of NewCo, and BlueTriton shareholders are expected to own 57% of the fully diluted shares of NewCo; the portion of shares of NewCo in excess of 49% that are held by any individual or group of former BlueTriton shareholders would be in the form of a separate class of common stock that is non-voting as to the election of directors of NewCo. The combined company is expected to continue to be listed on the NYSE, subject to approval of such listing by the NYSE.  Upon closing of the Transaction, the common shares of Primo Water, as a wholly owned subsidiary of NewCo, will no longer be listed on any public market.

Under the terms of the definitive agreement, the transaction will be effected by way of a court-approved plan of arrangement involving Primo Water under the Business Corporations Act (Ontario) and a merger involving BlueTriton under the laws of Delaware.

The transaction is subject to approval by Primo Water’s shareholders, as well as the satisfaction of customary closing conditions, including expiration of the waiting period under the HSR Act, receipt of other regulatory approvals and court approval of the arrangement of Primo Water. The transaction is expected to close in the first half of 2025.