Primo Brands (PRMB) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a leading North American pure-play healthy hydration company with a diversified portfolio, national footprint, and enhanced distribution capabilities, combining complementary strengths and iconic brands.

• The combined entity will benefit from consumer trends favoring health and wellness, with bottled water as a major and expanding category and diversified offerings across retail, home and office delivery, and premium water segments.

• Both companies bring financial strength and a shared focus on sustainability, stewardship, and community engagement.

• The merger enables innovation and expansion into new channels, geographies, and product segments, positioning for sustained long-term growth.

• The deal provides critical mass and scale to compete more effectively in a fragmented and growing $252 billion beverage market.

Financial terms and conditions

• The transaction is an all-stock merger of equals, with BlueTriton shareholders owning 57% and Primo Water shareholders 43% of the new company.

• Primo Water shareholders will receive a pre-closing special dividend of up to $0.82 per share ($133 million total).

• The combined company targets a net leverage ratio of approximately 3x at closing, aiming to delever to 2x–2.5x in the medium term.

• Combined LTM revenue as of March 31, 2024, is $6.5 billion, with adjusted EBITDA of $1.5 billion, including estimated synergies.

• NewCo anticipates maintaining Primo Water’s $0.36/share annual dividend, with long-term policy to be determined post-closing.

Synergies and expected cost savings

• The merger targets $200 million in run-rate cost synergies within three years post-closing, with the majority realized by the end of year two.

• One-time costs to achieve synergies are estimated at $115 million, with overall deal expenses of approximately $287 million.

• Synergies will be achieved through operational optimization, procurement efficiencies, IT/ERP integration, call center alignment, and SG&A rationalization.

• Additional value creation is expected from leveraging best practices, expanding innovation, and optimizing the combined route and distribution networks.

• Combined adjusted free cash flow for the twelve months ended March 31, 2024, was over $565 million.