Cott Corp., the largest manufacturer of private label soft drinks, has agreed to acquire privately held Cliffstar Corp., the leading store brand maker of shelf-stable juices, for $500 million in cash payable at closing plus a $14 million deferred payout to be made over three years.


Greg Jacobson, Cott Corp., private label soft drinks, Cliffstar Corp., shelf-stable juices, Jerry Fowden, chief executive officer








































































































































































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Cott acquires private label juice maker

July 9th, 2010

TORONTO – Cott Corp., the largest manufacturer of private label soft drinks, has agreed to acquire privately held Cliffstar Corp., the leading store brand maker of shelf-stable juices, for $500 million in cash payable at closing plus a $14 million deferred payout to be made over three years.

The deal is expected to close during the third quarter of 2010.

Cliffstar is also entitled to an additional contingent earnout of up to $55 million, based on the achievement of certain performance benchmarks during the fiscal year ending January 1, 2011 and the successful completion of certain expansion projects in the course of this year.

"As the clear leader in private label shelf-stable juice, Cliffstar is an ideal partner for Cott as we strengthen our position in private label beverages," said Jerry Fowden, Cott’s chief executive officer. "A combination with Cliffstar expands Cott’s product portfolio and manufacturing capabilities, enhances our customer offering and growth prospects and improves our strategic platform for the future. Combined with Cliffstar, Cott will be a more diversified company with long-term advantages for our shareowners and retailer partners."

Based in Dunkirk, N.Y., Cliffstar is the largest North American producer of store-brand apple juice, grape juice, cranberry juice and juice blends, with $654 million in trailing 12-month sales. The company has 11 facilities in the United States, including five bottling and distribution operations, three fruit-processing facilities, two fruit receiving stations and one storage facility. With the acquisition, Cott expects to achieve a more balanced business with a more diversified and complementary portfolio across many categories that will position it as an attractive one-stop solution to retailers’ private label beverage needs.

"We expect the combination with Cliffstar to be accretive to our shareholders on a cash basis," added Fowden. "In addition to strategic and operational upsides, the transaction is expected to generate significant tax benefits and synergies. Adjusting for these factors, we believe the purchase price is favorable relative to comparable transactions. This transaction will transform Cott into a multi-category beverage producer, which we believe will benefit our customers and create value for our shareholders."

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