Cott Buys Macaw
Cott Corporation announced its U.K. subsidiary, Cott Beverages Ltd., has acquired 100% of the shares of Macaw (Holdings) Ltd., the parent company of Macaw (Soft Drinks) Ltd., for approximately $135 million (75.7 million pounds).
According to Cott, Macaw is the largest privately-owned manufacturer of retailer-brand carbonated soft drinks in the United Kingdom. Its assets include six production lines -- four carbonated soft drink, one dilute-to-taste, and one aseptic -- in two manufacturing plants located in Nelson, Lancashire.
The acquisition significantly expands Cott's U.K. business and is expected to add approximately $100 million (55 million pounds) in annual sales. It is expected to be earnings per share neutral in 2005 and accretive thereafter. The acquisition is being financed under Cott's global credit facility, which was increased from $100 million to $225 million in connection with this transaction. This will leave $75 million available under the credit facility.
As a result of the transaction, for fiscal 2005 Cott now expects full-year sales growth of between 8% and 10%, EBITDA of between $215 and $220 million and capital expenditures of approximately $100 million. Earnings per diluted share are still expected to be between $1.06 and $1.11.
"The purchase of Macaw represents a significant strategic investment in our U.K. business," said John Sheppard, president and chief executive officer of Cott Corporation. "The additional production capacity and Macaw's manufacturing capability in the fast-growing aseptic beverage segment will allow us to expand the variety of products and packages we offer and enhance the service we provide to our customers."
Cott's U.K. division recently reported 12% growth in sales in the second quarter compared to the previous year (9.2% excluding the impact of foreign exchange). Carbonated soft drinks, dilute-to-taste and still beverages are manufactured in two plants located in Pontefract and Kegworth. Cott expanded to the U.K. in 1994 with the acquisition of assets from Ben Shaw (Pontefract) Ltd., followed by the purchase of Hero Drinks Group (U.K.) Ltd. in 1997.
"The acquisition of Macaw gives Cott U.K. the scale and efficiency to continue its growth strategy," added Andy Murfin, senior vice president of Cott Corporation and managing director of U.K. and Europe. "Macaw is a well-run company that has been highly successful in providing its customers with quality and innovation. We look forward to building on the strong foundation of growth already established as we integrate the businesses."
Commenting on the transaction, Andrew Cawthray said, "The sale of the company we have built over the past 15 years to Cott U.K. will provide additional growth opportunities for the enlarged U.K. operation for the benefit of our customers and employees alike."