Just a month after becoming the world’s largest independent bottler for retailers with their $1.25 billion acquisition of Cott Corp, Netherlands-based soda bottler Refresco Group has been taken over. Concluding a six-month pursuit, which involved a declined offer three months ago, Refresco was sold. The buyers are PAI Partners, a French private equity group, and British Columbia Investment Management (bcIMC). The deal is worth €1.62 in cash, giving Refresco shareholders a 41% premium from their April stock price and valuing the company at around €3.3 billion. This gives them an implied EBITDA multiple of 8.5x when including their Cott purchase. Banks such as JPMorgan, Rothschild, and Credit Suisse advised both sides on the deal.
This deal seems to be well received by all parties. Refresco has been growing steadily since they went public in 2015, and their CEO Hans Roelofs noted that “[Refresco’s] focus of growing alongside our customers in the markets where we currently operate and expanding geographically remains unchanged.” PAI, on the other hand, discussed their vision for the future of Refresco. Managing Partner Frédéric Stévenin metioned that PAI plans to provide value to Refresco by using their “wealth of experience in the European food and beverage industry.” Jim Pittman, the Senior Vice President of Private Equity at bcIMC, alluded to the interest bcIMC has had in Refresco for years, as well as their confidence in their track record of growth and global presence.
Refresco is an attractive acquisition in an industry that shows few signs of slowing down any time soon. Bottling is an incredibly fragmented market, with few global players and many regional bottlers making up the industry. Even companies like Coca Cola and PepsiCo do not own their bottling plants. Refresco’s purchase of Canada’s Cott Corp, which will add 29 bottling sites in the U.S., Canada, Mexico, and Great Britain, is evidence of their longer-term “buy-and-build” strategy for expansion. The goal of the investment, therefore, is to take on more debt since they are off the public market and to finance more deals. Refresco is certainly refreshed by the capital inflow, which will replace the 200-million-euro stock issuance they had planned for the Cott deal. However, while they would love to have PE backing forever, Roelofs has noted that “we have to be honest, of course [PAI] will…think about an exit,” in regards to a future reappearance on the public market. Regardless, Roelofs is still confident that the private equity capital will benefit Refresco long after PAI and bcIMC exit their positions in the company.
Private equity in the bottling industry is nothing new, and it often yields successful exits. Funds such as Arbor Investments, The Courtney Group, and Castanea Partners have all made successful investments in bottlers ranging from Coca-Cola Bottling Inc. and Pepsi-Cola Bottlers to Boylan Bottling Co. Undoubtedly, this market is ready for disruption. By building up a strong backing of capital, Refresco is making a push to be the company that will lead the industry into the future.