Tampa Company to Buy Canadian Specialty Pharmacy Group for $125M

Better Choice Co. is shifting its focus from the pet product industry to pharmaceuticals by acquiring the Canadian specialty pharmacy and health care group SRx Health Solutions Inc.

The Tampa-based Better Choice (NYSE: BTTR) will invest $125 million in an all-stock deal with SRx Health, a prominent Toronto health care services network that operates 35 specialty pharmacies and 40 health clinics across Canada.

Historically, Better Choice has concentrated its business on pet products, but in mid-August, management announced plans to reopen discussions with potential deal partners in an effort to diversify its business. The company will maintain its specialty pet food brand, Halo, following the transaction with SRx Health, according to a statement. Better Choice Chairman Michael Young described the deal as “transformational” with immediate infrastructure and distribution synergies.

SRx Health, one of the few specialty pharmacy operators in Canada, manages four clinical trial sites and two wholesale distribution facilities alongside its pharmacy and clinic locations. The company has plans to expand to 100 specialty pharmacy locations in mid-sized population centers across Canada, with future aspirations of expanding beyond the country’s borders.

Founded in 2013, SRx Health reported $161.5 million in revenue last year. In contrast, Better Choice recorded $38.6 million in annual revenue during the same period.

Adesh Vora, president and CEO of SRx Health, will take the helm as CEO of Better Choice after the deal is finalized, succeeding Kent Cunningham, who will transition to CEO of the Halo business unit. SRx CFO Dave Sohi will also be appointed as president of Better Choice.

Once the deal closes, SRx Health shareholders will own approximately 85% of the combined company. In addition, Better Choice will distribute 8% of the outstanding capital stock of its Halo subsidiary to shareholders.

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