On the Street: Cott Buying Clifstar

July 8/M&A Navigator -- Canadian soft drinks company Cott Corp will buy U.S. private-label juice producer Cliffstar in a cash deal, worth $500 million.

The buyer will use credit facilities, as well as the proceeds from a debt and equity issue to fund the deal, which is expected to close in the third quarter.

Under the terms of the agreement, Cliffstar will also receive a deferred consideration of $14 million and an additional earn-out payment of up to $55 million if certain performance-related targets are achieved.

Cott anticipates a cash tax benefit of some %75 million from the transaction. The related costs are estimated at $25 million.

Cott was advised in this transaction by Deutsche Bank Securities, while Morgan Stanley (NYSE:MS) acted as financial advisor to Cliffstar.

From the July 19, 2010, Prepared Foods E-dition