(Reuters) - Canada’s Cott Corp (BCB.TO) (COT.N) said on Monday it would buy U.S.-based bottled water provider Primo Water Corp (PRMW.O) for $549.4 million in cash and stock, as it seeks to strengthen its position in the North American market.
Cott has offered each Primo shareholder $14 in cash, stock or a combination of both, which implies a premium of 26.2% to Primo’s last close.
Shares of Primo were trading at near the offer price in premarket trading on Monday.
“As Primo and Cott have been strategic partners for six years, we expect a smooth transition and integration,” Cott’s Chief Executive Officer Tom Harrington said in a statement.
Cott in recent years has bought bottled water companies, including Europe’s Eden Springs and U.S.-based DS Services, as it shifts focus to its high-margin water business and away from its tea and coffee businesses.
The company is evaluating strategic options for its S&D Coffee and Tea coffee business as part of that transition.
North Carolina-based Primo would become a wholly owned unit of Cott after deal completion, expected by March 2020.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Sriraj Kalluvila