Mr. David Hass reports

PRIMO WATER ANNOUNCES CLOSING OF THE SALE OF SIGNIFICANT PORTION OF ITS INTERNATIONAL BUSINESS

Primo Water Corp. has closed the previously announced sale of a significant portion of Primo Water's international businesses in an all-cash transaction for $575-million. The transaction excluded the Aimia Foods, United Kingdom, Portugal and Israel businesses, but each of these will be sold across 2024.

"The completion of this transformative transaction simplifies and focuses Primo Water on our core pure play North American water business. Our greater focus also comes with the enhanced financial flexibility to pursue organic growth, reduce leverage, return capital via share repurchases and dividends, accelerate accretive tuck-in acquisitions, and engage in opportunities complementary and adjacent to our core North American water business," said David Hass, chief financial officer of Primo Water. "I am pleased to confirm that, as part of our renewed commitment to lower net adjusted leverage and to return capital to share owners, we will repay the outstanding balance on our cash flow revolver and the board of directors increased our $50-million share repurchase authorization to a total of $75-million."

The simplified, pro forma Primo Water will have:

• Greater focus on its pure play North American water business, where it enjoys national and local scale and is one of the leading players;
• An improved financial profile, accelerating the achievement of several previously announced 2024 targets, including improvements in adjusted gross margins and adjusted EBITDA margins, as well as adjusted free cash flow conversion;
• The financial flexibility to pursue organic growth, reduce leverage by repaying the cash flow revolver, return capital through share repurchases and dividends, accelerate accretive tuck-in acquisitions, and engage in opportunities complementary and adjacent to its core North American water business;
• A diversified business mix across key water channels, including water dispensers, water direct, water exchange, water refill and water filtration, as well as a balanced mix of residential and commercial customers.

Advisers

BMO Capital Markets Corp. acted as exclusive financial adviser and White & Case LLP served as legal adviser to Primo Water in the transaction.

Commencement of new chief executive officer

Robbert Rietbroek joined Primo Water as the company's chief executive officer on Jan. 1, 2024. Mr. Rietbroek was also appointed to serve as a director on Primo Water's board of directors.

In connection with the commencement of Mr. Rietbroek's service, the company issued its previously announced inducement equity award to Mr. Rietbroek. The award was made pursuant to the company's previously disclosed offer letter agreement with Mr. Rietbroek and as a material inducement to his joining Primo Water as chief executive officer and a member of the board.

The inducement award comprises 232,558 restricted share units (RSUs) and is being made outside Primo Water's existing equity incentive plans but subject to the same terms and conditions as if granted under the Primo Water 2018 equity incentive plan, as amended. Each RSU will entitle Mr. Rietbroek to receive one Primo Water common share for each RSU that vests. The RSUs will vest in equal instalments on each of the first two anniversaries of the grant date, subject to Mr. Rietbroek's continuous service through the applicable vesting dates. The RSUs were approved by the board of directors in reliance on the employment inducement exemption under Rule 303A.08 in the New York Stock Exchange's listed company manual, which requires public announcement of the number of RSUs comprising the inducement award.

About Primo Water Corp.

Primo Water is a leading North America focused pure play water solutions provider that operates largely under a recurring revenue model in the large-format water category (defined as three gallons or greater). This business strategy is commonly referred to as razor/razor blade because the initial sale of a product creates a base of users who frequently purchase complementary consumable products. The razor in Primo Water's revenue model is its industry-leading lineup of innovative water dispensers, which are sold through approximately 10,800 retail locations and on-line at various price points. The dispensers help increase household and business penetration, which drives recurring purchases of Primo Water's razor blade offering of water solutions. Primo Water's razor blade offering comprises water direct, water exchange and water refill. Through its water direct business, Primo Water delivers sustainable hydration solutions direct to customers, whether at home or to businesses. Through its water exchange business, customers visit retail locations and purchase a prefilled bottle of water. Once consumed, empty bottles are exchanged at the company's recycling centre displays, which provide a ticket that offers a discount toward the purchase of a new bottle. Water exchange is available in approximately 17,500 retail locations. Through its water refill business, customers refill empty bottles at approximately 23,500 self-service refill drinking water stations. Primo Water also offers water filtration units across North America.

Primo Water's water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo Water is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association (IBWA) in North America, which ensures strict adherence to safety, quality, sanitation and regulatory standards for the benefit of consumer protection.

Primo Water is headquartered in Tampa, Fla., United States.

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