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Primo Water Announces Two Strategic Acquisitions; Enters The Rapidly Growing Carbonated Home Beverage Market And Expands Retail Exchange Business Into Canada

Stocks in this article: PRMW

Company to Hold Conference Call on Wednesday, March 9, 2011 to Discuss Acquisitions, 2010 Preliminary Results and 2011 Guidance 

Single-Serve Cold Carbonated Beverage Acquisition Is Expected To Expand Household Product Adoption & Penetration

Bottled Water Exchange Acquisition Will Expand Service to Over 600 Retail Exchange Locations in Canada

Company Provides Preliminary Fourth Quarter Results and Introduces First Quarter and Full Year 2011 Guidance

Company Increases 2011 Expected Retail Location Growth of 5,700 to 6,700

WINSTON-SALEM, N.C., March 9, 2011 (GLOBE NEWSWIRE) -- Primo Water Corporation (Nasdaq:PRMW), a rapidly growing provider of three-and five-gallon purified bottled water, self-serve filtered drinking water and water dispensers sold through major retailers nationwide, today announced it will enter the single-serve cold carbonated beverage market through the acquisition of certain assets from Omnifrio Beverage Company, LLC ( The Company also announced it has entered the Canadian 18-liter purified bottled water exchange market through the acquisition of certain assets of Culligan of Canada, Ltd. ("Culligan Canada"). The Canadian exchange acquisition represents Primo's second transaction with Culligan following its acquisition of Culligan's self-serve filtered drinking water refill business in November of 2010. In addition, the Company provided preliminary fourth quarter results and introduced fiscal 2011 guidance.

Single-Serve Cold Carbonated Beverage Market Entry

The Company entered into an agreement to acquire certain assets of Omnifrio, which consist primarily of appliance and intellectual property related to single-serve cold carbonated beverages and consumable flavor cups, or "S-cups",and CO2 canisters used with the appliances to make a variety of cold beverages. The Omnifrio razor/razorblade (appliances/S-cups and CO2 canisters) business model is similar to the razor/razorblade business model utilized by Primo (dispensers/water). 

The acquisition of Omnifrio positions Primo Water in the $39 billion U.S. market for carbonated beverages. The Company plans to integrate the Omnifrio carbonation and single-serve cold-beverage technology into certain of its water dispenser appliances to develop multi-beverage hydration stations for both household and office use. Omnifrio has several patent applications pending for its carbonated beverage makers. Omnifrio has developed about 30 flavors of single-serve packs or S-cups for 8 or 16 ounce beverages with three carbonation levels. The appliances utilize a CO2 cylinder that must be refilled periodically. Primo intends to leverage its existing distribution infrastructure and offer retailers a CO2 exchange program. Primo expects to begin selling cold carbonated beverage appliances and flavor cups to specialty and catalog retailers in the U.S. in the fourth quarter of 2011. The Company expects to sell the appliance at higher gross margins than its existing appliance business and to sell the S-cup and CO2 cylinder consumables at higher gross margins than its existing margins on water.

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