Valuation 101: Cott Isn't Even Close To Cheap
Feb. 14, 2015, 10:13 AM
- Craft soda is starting to become a trend to watch closely, according to industry insiders.
- Though still accounting for only ~1% of the total U.S. soda market, major retail chains have increasingly been willing to bet on local craft brands in store aisles.
- The craft craze is old news for the beer industry where coming-of-age millennials buy craft/local beers at a 50% higher rate than brand-loyal older generations. Fading stars such as Budweiser and Bud Light are testament to the impact of the millennial paradigm.
- The craft influence in coffee hasn't been lost on Starbucks which has strategically deployed trucks on college campuses in an effort to win over students.
- Despite the progressive reputation of Starbucks, analysts think new upstarts such as Craft (subscription) and Cups (app) have a shot of gaining influence with the Indie-minded millennial crowd on "customization" and pricing.
- What to watch: An increase in M&A activity in the beverage sector is expected as major companies strategically pick off more local craft brands to incubate.
- Craft beer watch: BUD, OTCPK:SBMRY, TAP, OTCQX:HEINY, SAM, BREW, STZ, OTC:BIBLF, OTCPK:BRBMF.
- Craft coffee watch: GMCR, SBUX, JVA, SJM, KRFT, DNKN, QSR, MCD.
- Craft soda watch: PEP, KO, MNST, COT, DPS, OTCQB:JSDA, REED, SODA, FIZZ.
Nov. 6, 2014, 7:31 AM
- Cott (NYSE:COT) announces it acquired DSS Group for $1.25B.
- The purchase of DSS will give Coty a stronger presence in the home and office delivery business through DS Services of America.
- Guidance: Sales of $3B and EBITDA of $350M expected for the fiscal year ending in September.
- A conference call is scheduled for 8:30 a.m. to discuss the deal.
May 30, 2014, 8:29 AM
- Cott (COT) snaps up the assets of Aimia Foods through its U.K. business unit.
- The deal price of $133M includes $80M at closing plus a working capital adjustment of $33M and an on-target consideration of $20M.
- The company says the acquisition will give it new revenue channels.