The deal includes debt that Cott will assume and new equity that Cott will issue to the sellers.
Cott, a major North American supplier of private label soft drinks and other beverages, says the deal is part of its diversification efforts.
DS Services Holdings has about 1.5 million business and residential customers throughout the United States.
"We believe this acquisition will provide us with the resources and scale necessary to drive our future success and build shareholder value," Cott chief executive Jerry Fowden said in a statement.
Cott's shares were up about seven per cent in afternoon trading Thursday in Toronto and New York, off their post-announcement high.
The two businesses had a total of about $3 billion in net sales over the 12 months ended Sept. 27. The combined pro forma gross profit would have been 27 per cent of sales while adjusted EBITDA margins would have been 12 per cent.
Both companies had net losses over the same period — US$21 million at Cott and US$15.4 million at DS Services, according to information provided Thursday — but profitable after adjustments.
The combined company would have had a US$36.4 million net loss, $292 million of earnings before interest, taxes and other items (EBITDA) and $360 million of adjusted EBITDA, which excludes $38 million of costs related to a Cott bond redemption and $5.6 million of refinancing costs at DSS.
The companies expect to achieve $25 million per year of cost and revenue improvements by the end of 2017.