Cott Corp., a Canadian producer of private-label soft drinks and ice teas, agreed to buy DSS Group Inc. for about $1.25 billion to expand into the new markets of water and coffee home and delivery services.

The agreement includes the assumption of debt and the issuance of preferred shares to Crestview Partners LP and other selling shareholders, Mississauga, Ontario-based Cott said in a statement today. The purchase price is about 7.1 times DSS’s estimated 2014 adjusted earnings before interest, taxes, depreciation and amortization, according to the statement.

The acquisition accelerates Cott’s strategy of diversifying beyond carbonated drinks and juices and extends the company’s distribution channel beyond large retail and supermarket stores. Cott, which traces its roots back to the 1950s when Harry Pencer’s children were given Cott Black Cherry soda at summer camp in New Hampshire, is now one of the world’s largest producer of beverages on behalf of retailers and other companies.

The deal is Cott’s biggest since at least 1996, according to data compiled by Bloomberg. In 2010,Cott had paid $500 million for Cliffstar to expand into private-label juices.

Cott rose less than 1 percent to $6.06 in New York trading yesterday, trimming the shares’ decline to 25 percent for this year through yesterday. DSS is the parent of DS Services of America Inc. with about 2,100 customer routes.

Credit Suisse Group AG acted as financial adviser to Cott, while Drinker Biddle & Reath LLP provided legal advice, according to today’s statement. Barclays Plc was DSS’s financial adviser and Paul, Weiss, Rifkind, Wharton & Garrison LLP was its legal adviser.

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