AP News

Primo Water's deal sets stock afloat


Primo Water's deal with Cuisinart has set its stock afloat and may even sink some of its sparkling beverage competitors.

The purified bottled water company announced a three-year sales, distribution and licensing agreement Monday Cuisinart. Under the deal, Cuisinart will market and sell Primo's sparkling beverage appliances and other products in North America. Primo will supply carbon dioxide cylinders for Cuisinart's new line of sparkling beverage makers, which hit store shelves this month.

Primo and Cuisinart did not put a dollar value on the deal, but say there is significant growth opportunity for both companies in the expanding market.

The news sent shares of Primo up more than 54 percent by early afternoon, gaining 40 cents to $1.14. Shares of SodaStream International Ltd. fell 95 cents, roughly 3 percent, to $35.54.

Janney Capital Markets analyst Mitchell Pinheiro said that the deal could be negative for SodaStream as this is the "first legitimate competitive threat" to market share in this fairly new market. But he also said that it could raise awareness and popularity for everyone in the sector, which would not hurt SodaStream.

However, he said that while SodaStream has grown quickly in the U.S., it may not be a big enough and strong enough brand to fend off intense competition.

Shares of Primo Water Corp. remain at the low end of its 52-week trading range of 69 cents to $6.04. SodaStream's remain at the middle of its $27.60 to $48.13 52-week trading range.


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