DS Services, a national direct-to-consumer provider of bottled water, office coffee and water filtration services and a portfolio company of Crestview Partners, has entered into an agreement to be acquired by Cott Corporation for approximately $1.25 billion, including the assumption of debt and the issuance of preferred shares to Crestview Partners and other selling shareholders. Crestview Partners acquired DS Services (DSS) in September 2013.
DS Services (formerly known as DS Waters of America) is a diversified beverage company providing bottled drinking water, brewed beverages and water filtration systems to homes, offices, restaurants, food service organizations, convenience stores, and retail locations. DSS serves approximately 1.5 million customers through its network of over 210 sales and distribution facilities and daily operation of over 2,100 routes. Its bottled water products are sold under the brand names Alhambra®, Athena®, Belmont Springs, Crystal Springs®, Deep Rock®, Hinckley Springs®, Kentwood Springs®, Mount Olympus®, Nursery® Water, Sierra Springs®, and Sparkletts®. DSS offers brewed coffee and tea beverages under the Standard® Coffee brand, as well as office break room supplies. The company also provides water filtration systems, equipment and services under the Relyant® brand. DS Services is headquartered in Atlanta (www.water.com).
“We firmly believe that bringing DSS into the Cott family will provide additional opportunities for the benefit of our employees and customers alike. Our leadership team is excited to work with Cott to drive growth, while creating cost synergies as well as portfolio expansion,” said Tom Harrington, CEO and President of DSS. “On a final note, we want to thank Crestview Partners. They have been very supportive partners to DSS and to me personally.”
Crestview Partners invests from $100 million to $250 million in companies with enterprise values up to $3 billion. Sectors of specific interest include media, financial services, healthcare and energy. The firm will invest in other industries where its relationship network and senior operating capabilities provide an advantage. The firm was founded in 2004 and is based in New York (www.crestview.com).
“We have the highest regard for Tom and his team and have greatly enjoyed our partnership. We believe this transaction will enable DSS to accelerate its growth initiatives and will firmly establish Cott as a leader in the beverage space,” said Jeff Marcus, DSS’s Chairman and a Partner at Crestview. Mr. Marcus will serve on Cott’s Board of Directors as an observer.
Cott is one of the world’s largest producers of beverages on behalf of retailers, brand owners and distributors. Cott produces multiple types of beverages in a variety of packaging formats and sizes, including carbonated soft drinks, 100% shelf stable juice and other juice-based products. With over 4,000 employees, Cott operates manufacturing facilities in the United States, Canada, the United Kingdom and Mexico. The company is based near Toronto in Mississauga, ON (www.cott.com).
The acquisition of DSS will accelerate Cott’s acquisition based diversification outside of carbonated soft drinks and shelf stable juices, and is in line with Cott’s strategy of focusing on higher margin growth oriented businesses in beverage and related products.
Barclays acted as financial advisor to DSS on the transaction and Credit Suisse acted as financial advisor to Cott. The acquisition is expected to close by the end of January 2015.
2014 PEPD • Private Equity’s Leading News Magazine • 11-6-14