KO - Primo Water: M&A Puts More Gains On Tap
2024-06-17 17:03:27 ET
Summary
- Primo Water Corporation announced plans to merge with BlueTriton Brands, creating a leading North American healthy hydration company.
- The combined firm has significant market opportunities in bottled water and related products, with potential for operational synergies and cost savings.
- Despite concerns over leverage, valuation metrics suggest potential for value accretion and upside for shareholders, making Primo Water a "Buy."
June 17th ended up being a fascinating day for shareholders of Primo Water Corporation ( PRMW ). Even though shares of the company barely budged in response, rising by less than 4%, the company made a monumental announcement that it is merging with a privately held company by the name of BlueTriton Brands . Relative to cash flows, investors in Primo Water will be getting an outsized portion of the combined business, though the lack of enthusiasm might be because leverage will increase as a result. But even with factoring in that leverage, the picture looks more or less neutral at worst, and truly value-accretive at best....
Primo Water: M&A Puts More Gains On Tap