Cott Corp. will buy Cliffstar in a deal that has the Canadian soft drink company spending $500 million and reaching into New York to expand its offerings to consumers.

Early trading viewed the deal favorably, sending Cott shares up about five percent Thursday morning.

Cott is financing the deal via a new $375 million issuance and a common equity issuance of up to $95 million, along with borrowing against its existing asset-based $75 million facility.

A Stifel Nicolaus report posted at Thomson Analytics suggested the deal will help Cott build out, and not scale; it said the deal “diversifies Cott… into a more stable category than carbonated soft drinks” and offers “meaningful cost and revenue synergies.”

Cott identified cost synergies of $20 million on an annualized basis as part of the deal.

The deal represented a relatively attractive purchase price, especially after taking into account synergies and tax savings. In an 8K filing, Cott disclosed that the transaction was valued at a multiple of 7.1x adjusted Ebitda over the last twelve months, or 4.9x "inclusive of significant tax and run-rate cost."

Calls seeking comment were not acknowledged by press time.

Skadden Arps’ M&A partners in New York Stephen Arcano and Thomas Greenberg worked on the transaction.

Based in Dunkirk, New York, Cliffstar’s primary business is a private-label juice platform. The company can earn is an additional contingent earnout consideration of up to $55 million if performance goals are met.

The deal marks the latest transaction in the foods space, and its expected more will come. Recently, Farley’s & Sathers Candy Co.  tapped Goldman Sachs to represent it in a potential sale, while listed restaurant California Pizza Kitchen is also rumored to be looking for possible buyers. Other deals include Hearthside Food Solutions’ buy of Consolidated Biscuit and a cereal business, Heinz’s Foodstar play in China, and ConAgra’s buy of Elan Nutrition.