Poland Spring parent BlueTriton, Primo Water to merge, creating a water giant

By Tomi Kilgore

Primo Water to pay a special dividend of 82 cents a share, and stock surges toward a 19-year high

Primo Water Corp. and BlueTriton Brands Inc., the parent of Poland Spring and Deer Park water brands, announced Monday an agreement to merge, which would create a water giant with $6.5 billion in annual revenue.

As part of the deal, Florida-based Primo Water, which had a market capitalization of $3.6 billion at Friday's close, will pay a special dividend of 82 cents a share before the merger closes, in addition to its regular quarterly dividend of 9 cents a share.

The merger is expected to close in the first half of 2025.

"Today's announcement marks an important milestone for the North American beverage category with the creation of a new, leading healthy hydration platform," said Dean Metropoulos, Chairman of BlueTriton, who will be nonexecutive chairman of the combined company.

Primo Water's stock (PRMW) (CA:PRMW) rallied 3% in midday trading, which puts it on track to close at the highest price since September 2005.

After the deal closes, BlueTriton shareholders will own 57% of the combined company and Primo Water shareholders will own 43%.

The companies expect the merger to present cost synergies of about $200 million, which should be fully realized within three years.

"The combined company will benefit from a diversified portfolio of iconic brands, a national footprint and the strength of the combined delivery platform to better serve customers anywhere and any way they hydrate," said Primo Water Chief Executive Robbert Rietbroek.

Connecticut-based and privately held BlueTriton, which produces water brands including Poland Spring, Deer Park, Arrowhead, Saratoga and Pure Life, had revenue of $4.7 billion during the 12 months ending March 31, 2024, up from $3.9 billion in 2021, when it was acquired by an affiliate of One Rock Capital Partners, in partnership with Metropoulos & Co.

Primo Water had revenue of $1.8 billion during the year to March 2024, up from $1.4 billion in 2021.

Over the same period, BlueTriton grew adjusted earnings before interest, taxes, depreciation and amortization by a compounded annual growth rate of 24% to $857 million, and Primo Water grew adjusted Ebitda at a rate of 13% to $399 million.

Primo Water's stock has run up 52.8% year to date, while the S&P 500 index SPX has gained 14.1%.

-Tomi Kilgore

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06-17-24 1351ET

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