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Saving Cott Corporation — From $0.50 to $10+ Stock Price

Saving Cott Corporation — From $0.50 to $10+ Stock Price

Location: Toronto, Canada · Tampa, Florida · USA


Type: Corporate Turnaround · Cost Restructuring · Change in Control


The Company

After a sabbatical from Microsoft, Mr. Gonzalez joined Cott Corporation, a Canadian company based in Toronto and listed on the Toronto Stock Exchange. Cott was the largest global manufacturer of private-label soft drinks and beverages for Walmart, Loblaw, Super Value (Target/Kroger), Costco, Tesco, Publix, and others. Founders Harry and later Gerry Pencer built the Company on a foundational relationship with Sam Walton, who recognized how private-label soft drinks helped transform Walmart from a discounter into a branded retailer that controlled its own product quality and price positioning. Sam's Choice and Sam's Cola played a defining role in that evolution — a legacy that helped fuel Walmart's private-label portfolio, which today accounts for over a quarter of its total grocery sales.


The Situation

A new leadership team, without full appreciation of this history and under heavy pricing pressure from Cott's largest accounts, invested in bottled water manufacturing — a significant category in Europe, Asia, and Canada (where Cott held rights to natural springs in the Rocky Mountains), but not in the US. A mega production facility was built in the Dallas Metroplex to meet demand that didn't materialize immediately.


Meanwhile, the new CEO, Brent Willis, challenged Mr. Gonzalez to relocate the HQ from Toronto to Tampa, Florida, while also building a case for private equity to acquire the Company — a move to Tampa having made the deal a domestic one rather than a cross-border transaction. Mr. Gonzalez designed a Change in Control plan to retain key players through the process, and the Company reached an agreement in principle with a large PE firm. But the Board, wanting more money, extended negotiations — and on September 17, 2008, the subprime mortgage crisis hit, triggering a liquidity crunch that froze every large transaction overnight. The deal died.


The Crisis

After the failed privatization, the Board terminated the CEO and appointed a board member as interim CEO while searching for a permanent replacement. During this period, the leadership team built by the prior CEO — alongside Mr. Gonzalez — worked out a restructuring plan to keep the Company from collapsing under its debt load:

  • The new CFO, a former Walmart executive who had led global acquisitions, renegotiated debt covenants as the stock fell to $0.50 per share, risking delisting
  • The new Head of Manufacturing, an experienced engineer from Tropicana, renegotiated pricing on key commodities — sugar, high fructose corn syrup, aluminum, and plastic pellets — to buy breathing room to operate
  • A new executive hired to run the European business and Cott's own Royal Crown International (RCI) brand, backed by two sales executives recruited from Pepsi Cola International, gained significant ground by selling RCI concentrate into new markets
  • These moves were only enough to keep the Company afloat, so Mr. Gonzalez recommended — and personally led — a significant people-restructuring plan, since his peers were too attached to their own teams to execute it themselves

The Outcome

The restructuring saved the Company over $600M, and the stock recovered from $0.50 to over $10 per share — the best-performing stock on the Toronto Stock Exchange that year. Later, a former Cott executive who had been terminated assembled an investor group and acquired a large block of common shares, triggering a genuine Change in Control event. The Board approved Mr. Gonzalez's CiC package, structured on similar terms to the plan he had built at PanamCo.