Company: PRMB
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001193125-25-012325
Chunk: 81

Company: Primo Brands Corp
Filing Date: 2025-01-24
Form: S-1
Chunk 81
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 pro forma balance sheet date is $93.10 million. The consideration for the business combination includes $13.5 million for stock options, $39.6 million for performance-based RSUs, and $13.2 million for time-based RSUs transferred to associates of Primo Water when the acquiree’s awards were substituted by the replacement awards, which relates to past service, for an aggregate amount of $66.3 million included in additional paid-incapital. The balance of $26.8 million is attributed to post-acquisition compensation cost. 50

The estimated fair value was estimated using a Black-Scholes option pricing model for the 1,194,877 stock options, considering the terms and conditions upon which the stock options were granted, using the following assumptions:

|                                        |     | Stock options |       |   |
| Expected dividend yield                |     |               |   1.4 | % |
| Weighted average expected volatility   |     |               |  27.6 | % |
| Weighted average risk-free rate        |     |               |  4.14 | % |
| Weighted average expected life (years) |     |               |  3.90 |   |
| Share price                            |     | $             | 24.21 |   |
| Weighted average exercise price        |     | $             | 14.30 |   |
| Weighted average fair value            |     | $             | 11.31 |   |

The expected volatility of these stock options was determined using historical volatility rates of Primo Water, the dividend yield was determined using Primo Water’s expected dividends and the expected life was determined using the weighted average life of Primo Water’s past options issued. Primo Water assumptions and history are used as a proxy for Primo Brands for purposes of the pro forma adjustment. The risk-free rate is based on the U.S. Treasury yield in effect with a term equal to expected term used in the Black-Scholes model. The estimated fair value of the 793,040 time-based RSUs and 1,365,976 performance-based RSUs converted into 2,494,926 time-based RSUs was based on the quoted market price of Primo Shares as of November 8, 2024.

| (3) | The identifiable intangible assets consist of indefinite life trade names and customer relationships, which are    
 assumed to be amortized over 15 years for the purpose of these pro forma condensed combined financial