Better Choice Company to acquire SRx Health for $125M

Better Choice Company announced signing a definitive agreement to acquire SRx Health Solutions, a provider of innovative healthcare solutions, in an all-stock transaction for approximately $125M. SRx Health operates one of the largest specialty pharmacy networks in Canada with 35 specialty pharmacy locations, 40 specialty health/infusion clinics, 4 clinical trial sites and 2 wholesale distribution facilities2. SRx Health is only one of a few specialty pharma operators in Canada with a network that extends across Canada, making it one of the most accessible providers of specialty healthcare in the country. SRx Health in 2023 generated C$161.5 million in revenue and C$11.4 million in pro forma Adjusted EBITDA. Better Choice will continue to operate its portfolio of established premium and super-premium pet products under the Halo brand. Upon closing, Better Choice will emerge as a leading global health and wellness company by providing products and solutions for families to make better choices. The combined entity will leverage operational synergies including infrastructure and distribution, as well as implement growth strategies across both entities to launch into new verticals and geographies. Under the terms of the arrangement agreement, each share of SRx Health common stock issued and outstanding will be converted into common stock of Better Choice. The exchange ratio for conversion of the SRx common stock into Better Choice common stock will be determined based on the 30-day volume weighed average price of the common stock of Better Choice subject to an aggregate share collar, with any resulting fractional shares to be rounded to the nearest whole share. At the effective time of the acquisition, securityholders of SRx Health will own approximately 85% of the combined company and securityholders of Better Choice will own approximately 15% of the combined company, on a fully diluted basis. As part of the transaction, Better Choice will spin-out 8% of the issued and outstanding capital stock of its subsidiary, Halo, Purely For Pets, Inc., to Better Choice stockholders immediately prior to the effective time of the transaction. The transaction has been approved by the Board of Directors of both companies. The closing of the transaction is subject to customary closing conditions, including the receipt of required stockholder approvals from SRx Health and Better Choice. The transaction is expected to close in the fourth quarter of 2024. The combined company’s Board of Directors following the consummation of the transaction will consist of five members including Adesh A. Vora, Pharm. D., as Chairman, Michael Young, Lionel Conacher, Kent Cunningham, and David White. The combined company will be led by Adesh A. Vora, the founder, President, and CEO of SRx Health, as Chief Executive Officer of Better Choice. Mr. Vora brings over 24 years of pharmacy and healthcare experience to SRx and leads the company with both a deep knowledge of and passion for the Canadian healthcare system. Since SRx’s inception in 2013, Adesh has successfully grown the company from just one specialty pharmacy into a national, comprehensive healthcare service provider. He proudly serves on the board of directors of the Neighbourhood Pharmacy Association of Canada, and as President of the board of Seva International Charitable Foundation. Adesh holds a Doctor of Pharmacy degree from the University of Illinois and has completed Alumni Programs at Harvard Business School and the Massachusetts Institute of Technology Sloan School of Management. Dave Sohi, CA, CPA, CBV, currently CFO of SRx Health, will be appointed President of Better Choice. Kent Cunningham, current CEO of Better Choice, will be appointed as CEO of the Halo business unit. Nina Martinez will remain in her role as CFO of Better Choice.