Acquisitions

3 Months Ended

Apr. 03, 2021

Legacy Primo Acquisition

In March 2020, the Company completed the Legacy Primo Acquisition, adding North America’s leading single source provider of multi-gallon purified bottled water, self-service refill drinking water and water dispensers sold through major retailers to the Company’s catalog of residential and commercial bottled water delivery businesses in North America and Europe. The Legacy Primo Acquisition was structured as an exchange offer to purchase all of the outstanding shares of common stock of Legacy Primo for per-share consideration of (i) $14.00 in cash, (ii) 1.0229 common shares plus cash in lieu of any fractional common share, or (iii) $5.04 in cash and 0.6549 common shares, at the election of Legacy Primo’s stockholders, subject to the proration procedures set forth in the merger agreement. Immediately following the consummation of the exchange offer, we indirectly acquired the remaining Legacy Primo shares through a merger between Legacy Primo and one of our wholly-owned subsidiaries.

The total cash and stock consideration paid by us in the Legacy Primo Acquisition is summarized below:


(in millions of U.S. dollars, except share and per share amounts)
Fair value of common shares issued to holders of Legacy Primo common stock (26,497,015 shares issued at $14.25 per share)	$	377.6
Cash to holders of Legacy Primo common stock	216.1
Cash paid to retire outstanding indebtedness on behalf of Legacy Primo	196.9
Settlement of pre-existing relationship	4.7
Fair value of replacement common share options and restricted stock units for Legacy Primo awards	2.9
Total consideration	$	798.2

The table below summarizes the previously reported estimated acquisition date fair values, measurement period adjustments recorded, and the final purchase price allocation of the assets acquired and the liabilities assumed:


(in millions of U.S. dollars)	Originally Reported		Measurement Period Adjustments		Acquired Value
Cash and cash equivalents	$	1.3	$	—	$	1.3
Accounts receivable	21.6		—		21.6
Inventory	18.4		—		18.4
Prepaid expenses and other current assets	5.3		—		5.3
Property, plant and equipment	107.8		—		107.8
Operating lease right-of-use-assets	4.3		—		4.3
Goodwill	301.2		1.3		302.5
Intangible assets	421.6		—		421.6
Other assets	0.4		—		0.4
Current maturities of long-term debt	(2.3)		—		(2.3)
Accounts payable and accrued liabilities	(42.0)		(0.2)		(42.2)
Current operating lease obligations	(1.4)		—		(1.4)
Long-term debt	(5.6)		—		(5.6)
Operating lease obligations	(3.0)		—		(3.0)
Deferred tax liabilities	(27.6)		(1.1)		(28.7)
Other long-term liabilities	(1.8)		—		(1.8)
Total	$	798.2	$	—	$	798.2

Measurement period adjustments recorded during the three months ended April 3, 2021 include a deferred tax adjustment related to the final valuation and an adjustment to accounts payable and accrued liabilities based on a review of the respective fair value as of the date of the Legacy Primo Acquisition. The measurement period adjustment did not have a material effect on our results of operations in prior periods.

Supplemental Pro Forma Data (unaudited)

The following unaudited pro forma financial information for the three months ended March 28, 2020 represent the combined results of our operations as if the Legacy Primo Acquisition had occurred on December 30, 2018.


	For the Three Months Ended
(in millions of U.S. dollars, except per share amounts)	March 28, 2020
Revenue	$	514.7
Net loss from continuing operations	$	(13.0)
Net income	$	17.9
Net loss per common share from continuing operations, diluted	$	(0.09)
Net income per common share, diluted	$	0.13