S&P: Cott on developing watch

Standard & Poor's said it placed Cott Corp.'s B+ long-term corporate credit rating on CreditWatch with developing implications.

The CreditWatch placement follows news that Cott is evaluating strategic alternatives to enhance shareholder value through either complementing its strategy of organic growth and growth through diversification, or pursuing another alternative, said Lori Harris, an S&P analyst.

The ratings reflect the company's vulnerable business risk profile and aggressive financial risk profile, Harris said in a press release.

The ratings also consider the company's small size in a sector dominated by companies with substantially greater financial resources and market presence, weak profitability, customer concentration, susceptibility to commodity cost swings and its participation in the mature and highly competitive carbonated soft drink and juice markets, the analyst said.

These factors are partially offset by Cott's leading market positions in private label take-home carbonated soft drinks in the United States, United Kingdom and Canada, as well as shelf stable juices in the United States, Harris added.

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