Primo Water’s merger with Glacier Water was successfully completed today. So at least one part of the thesis was right: this was a deal that was not only very probable to close, but also probable to close fast. But the most important part of the story isn’t clear yet: what former Glacier Water shareholders will exactly receive. I think it’s going to work out as expected since in the Consent Solicitation Statement that was mailed just a week ago the company estimated a payment of $12.17 in cash, 0.87 of a share of Primo stock and 0.54 of a warrant to purchase Primo stock. So it appears that the company was indeed being slightly conservative in its earlier estimates since then it was expected a cash component of $12.13/share. I guess we will have some more clarity very soon, but since some shares will remain in escrow for one year it will take some time to know for sure how this deal plays out.
Disclosure
Author is long Glacier Water
I missed the part about escrow. Is it the shares or the warrants that are in escrow?
The shares: see my original post for more details.
Well done on this one, AV (so far at least, knock on wood). Did you ever find out if the warrants will be trade-able?
No idea, but if i would guess: probably not. Since they will vest at different dates making them tradable will be messy.
What return did you make on it?
One trillion dollars
Sweet, infinite irr!
https://www.youtube.com/watch?v=jTmXHvGZiSY
Seems like the final consideration was increased a little bit more:
Have you received cash/warrants yet? I haven’t received anything in IB account.
Nothing yet, will probably take a couple of days.
Cash, shares and warrants finally arrived yesterday 🙂
Did you receive 0.87 shares? I only received 0.25 shares.
The rest of the shares are held in escrow
Ah thanks. Saves some property tax 🙂
I got this in my interactivebrokers account. Are the warrants supposed to go to an exchange to be available to be sold?
Did you have a look at OACQR or BHACR, mentioned on the AFCO discussion? The former performed as expected, the latter is still pre-deal… I’m convinced that “quality” of these is maybe less important than the deal itself, and so also have been looking at JSYNR and ANDAR. Do have a look at the chart of OACQR pre- and post-deal announcement.
No, didn’t take a look (yet). Have been traveling the past month 🙂
according to their presentation, this is the consideration paid:
FINAL TRANSACTION SUMMARY
Total consideration paid of $273 million consisting of the following:
$50.0 million in cash;
$36.0 million consisting of 3.2 million of Primo common shares representing
less than 11% of fully diluted shares outstanding;
$81.0 million in Glacier Trust Preferred Securities, which bear interest at 9.1%,
have a term through 2028 and allow holding payments for up to 5 years;
$96.0 million of Glacier indebtedness that was retired; and
2.0 million warrants for the purchase of Primo common shares at $11.88 per
share
I don’t see a provision for issuing more shares….can you figure this out?
Thanks
This presentation doesn’t contain anything new, these are just the same numbers that they used when the transaction was closed. The $ amount for the stock consideration also contains the shares that are still in escrow.
Its been over six months since the deal closed. None of the escrowed shares have yet hit in my IB account. Do you have any insight into what may be going on?
IR communicated last week that the shares are approved to be released , so they can show up in your account any day now.
Did you receive 0.87 shares? I only receive 0.40 shares
I also only received 0.4 shares so far. Any idea why?
My understanding is the last ~ 50% of the shares are released from escrow one year after the closing date, so I would assume sometime in December 2017.