Culligan International has agreed to acquire a “significant portion” of Primo Water Corp – a provider of sustainable drinking water solutions in North America and Europe – in an all-cash transaction valued at up to $575 million.
US- and Canada-listed Primo Water wants to focus on its North American business, and is offloading “a significant portion” of its business outside North America.
Primo Water said the transaction does not include its Aimia Foods business, nor its operations in the UK, Portugal and Israel. However, the group added each of those units “will be sold across 2024”.
In a statement, Primo Water CEO Tom Harrington said the company would focus on its “core North American water business”, adding: “We are pleased to have reached an agreement that we believe unlocks significant value for Primo Water shareholders. Looking ahead, we will be laser-focused on growing the North American business, increasing our profitability and margins, enhancing our balance sheet strength, and returning capital to shareowners.”
Primo Water was acquired by publicly-listed beverage group Cott Corp. in 2020, with the enlarged entity retaining the Primo Water name.
Central to Primo Water’s business model are water dispensers, which are sold through 10,800 retail outlets. The company also delivers water products to homes and businesses. Its water refill business operates 23,500 self-service refill stations, while it also offers water filtration units.
The group’s B2B brands include Crystal Springs and Canadian Springs in North America and Eden Springs in Europe. Meanwhile, its bottled water brands include Mountain Valley, which is sold to retailers in the US.
In 2022, Primo Water generated revenue of $2.2bn, up 7% on a year earlier. The company’s operating income stood at $127.9m, versus $103m the year previous. Its net income was $30m, against a net loss of $3m in 2021.
The company’s North America business made up $1.69bn of its annual revenue and generated an operating income of $203.7m, with its two other divisions (of Europe and ‘other’) producing operating losses.