Is it ‘prime’ water or ‘cousin’ water? Either way, so far it is hot water. Primo Water Corporation (NASDAQ: PRMW) priced an initial public offering of 8,333,333 shares of common stock at a price of $12.00 per share. The company is a North Carolina-based and it sells three-gallon and five-gallon purified bottled water and water dispensers sold through major retailers nationwide.
The price range had been $11 to $13 per share, which generated $90.7 million at the mid-point without the effect of overallotments. Stifel Nicolaus Weisel was the sole book-running manager; co-managers were listed as BB&T Capital Markets, Janney Montgomery Scott, and Signal Hill. Primo has granted the underwriters a 30 day option to purchase up to an additional 1,250,000 shares at the initial public offering price, which has almost certainly been exercised.
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The company said that it plans to use $60 million and funds from its new senior revolving credit facility. The company will issue additional shares directly to Culligan Store Solutions LLC and will pay for the Culligan Refill acquisition at roughly $105 million.
For the first half of 2010, revenue was roughly $21 million and the loss was approximately $6.1 million; 2009 revenue was $47 million with a loss of $14.9 million.
Primo may be able to avoid at least some of the backlash against bottled water. The company has a water bottle exchange, it recycles, it avoids landfills, its containers are reused 40 times before being recycled, and the theme is a green company with a “zero waste” model.
The “Primo” is actually neither ‘cousin nor prime’… It is after the Chairman & CEO Billy Prim.
So far investors are calling it Prime Water. After a $12.00 pricing, Primo Water shares are at $13.82 and the after-market trading range is listed as $13.12 to $15.00. At almost NOON EST the stock has traded 2.35 million shares.
UPDATE FOR CLOSE: Primo Water closed up 7.9% at $12.95 on more than 3.7 million shares.
JON C. OGG