10:46 AM EDT, 06/17/2024 (MT Newswires) -- Primo Water ( PRMW ) agreed to merge with Poland Spring parent BlueTriton on Monday in an all-stock transaction that will create a new publicly traded drinking-water company in North America with nearly $7 billion in combined revenue.

Stockholders of both companies will exchange their respective shares into shares of a new holding company. Once the transaction closes, Primo Water ( PRMW ) shareholders and holders of incentive equity will own 43% of the new company's outstanding shares while BlueTriton investors will own 57%.

Shares of Primo Water ( PRMW ), which makes multi-gallon bottled water containers, dispensers and appliance filtration products, rose 7% in morning trade. BlueTriton, which was operating as Nestle Waters North America until its rebranding in April, was acquired in 2021 for $4.3 billion by the private equity firm One Rock Capital Partners in partnership with Metropoulos & Co.

The combined company, to be listed on the New York Stock Exchange, will have an estimated $6.5 billion in revenue and $1.5 billion in adjusted earnings before interest, taxes, depreciation and amortization for the 12 months ended March 31. That is inclusive of an estimated $200 million in run-rate cost synergies to be fully realized within three years following close. The synergies will require one-time costs of about $115 million to capture.

"The transaction is expected to deliver significant value to our shareholders along with the opportunity to participate in the long-term upside potential of the combined company, which will build upon and complement our existing healthy hydration platform," Primo Water ( PRMW ) Chief Executive Robbert Rietbroek said in a joint statement.

Rietbroek will serve as CEO of the combined company and Primo Water ( PRMW ) Chief Financial Officer David Hass will serve as CFO of the new company. BlueTriton Chief Operating Officer Rob Austin will serve as COO.

The transaction is expected to be completed in the first half of 2025, depending on closing conditions and regulatory approvals. Primo plans to pay a special dividend of $0.82 per share, up to $133 million in aggregate, before the close. The merger will further expand BlueTriton's distribution across a "broader base of customers," BlueTriton CEO Joey Bergstein said.

"The increased presence, diversified product portfolio, focus on free cash flow generation, strong balance sheet and estimated cost synergies provide the foundation for long-term value creation for our shareholders," said BlueTriton Chair Dean Metropoulos, who will serve as non-executive chairman of the new company's board.

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