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Cott completes Cliffstar acquisition

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Cott completes Cliffstar acquisition

Cott completes Cliffstar acquisition
August 18
13:49 2010

Cott Corporation announced today that it has completed its previously announced acquisition of substantially all of the assets and liabilities of Cliffstar Corporation and its affiliated companies for U.S. $500 million in cash, subject to adjustments for working capital, indebtedness and certain expenses. Cliffstar is entitled to additional contingent earnout consideration of up to a maximum of U.S. $55 million, the first U.S. $15 million of which is payable upon the taking of substantial steps toward upgrades of certain expansion projects in 2010, and the remainder is based on the achievement of certain performance measures during the fiscal year ending January 1, 2011. Cliffstar is also entitled to U.S. $14 million of deferred consideration, which will be paid over a three-year period.

“The completion of the Cliffstar transaction is an important step for Cott,” said Jerry Fowden, Chief Executive Officer of Cott. “This combination is a strategic investment in the future as it makes Cott a more balanced and diversified private label supplier with a much broader product portfolio, a manufacturing infrastructure that is second to none in private label and improved growth prospects,” continued Fowden. “As we welcome the Cliffstar organization into Cott, we believe that together we can create shareholder value with significant synergies and provide our employees a brighter future while delivering enhanced opportunities for our retailer partners.”

Cott financed the acquisition through the closing of its previously announced private placement offering of up to U.S. $375 million in aggregate principal amount of 8.125% senior notes due 2018 (the “Note Offering”) and underwritten public offering of 13,340,000 shares (the “Equity Offering”) at a price of U.S. $5.60 per share (including the exercise of the underwriters’ over-allotment option for 1,740,000 shares). Cott financed the remainder of the purchase price through borrowings under its asset based lending facility, which Cott refinanced in connection with the Cliffstar acquisition to, among other things, provide for the acquisition of Cliffstar, the Note Offering and the application of net proceeds therefrom, the Equity Offering and the application of net proceeds therefrom and increase the amount available for borrowings to U.S. $275 million.

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