The stock price of Better Choice Company Inc. (NYSE: BTTR) saw a significant uptick following the Wednesday closing of business. After hours trading saw a 7.62% increase in BTTR shares, bringing them to $2.26. Following a substantial loss of 17.32% during the regular session, when the stock ended at $2.10, there was a minor rebound. The company’s earlier-in-the-week strategy announcement is what caused the price to fluctuate.
Better Choice Announced Acquisition of SRx Health
Better Choice announced the signing of a formal agreement to buy SRx Health Solutions Inc. in a significant strategic move. The acquisition will be carried out as an all-stock deal with a $125 million estimated value. Leading supplier of cutting-edge healthcare solutions, SRx Health runs one of the biggest networks of specialty pharmacies in Canada.
There are 40 specialist health and infusion clinics, two wholesale distribution facilities, four clinical trial sites, and 35 specialty pharmacy outlets in the network. Because of its wide network across Canada, SRx Health is among the most easily available specialist healthcare providers in the nation. SRx Health recorded C$161.5 million in sales and C$11.4 million in pro forma Adjusted EBITDA in 2023.
Transformational Impact on BTTR
Better Choice hopes to strengthen its standing as a preeminent international health and wellness business with this purchase. Under the Halo brand, the business will keep selling its current line of premium and ultra-premium pet supplies. Significant operational benefits from the transaction are anticipated, including enhanced distribution and infrastructure networks. With an estimated value of over $1.7 million, Better Choice intends to use these synergies to boost growth and enter new verticals and markets.
Ownership Structure Post-Acquisition
Under the terms of the agreement, SRx Health’s common stock will be converted into Better Choice common stock based on a 30-day volume-weighted average price, subject to an aggregate share collar. Upon completion of the acquisition, SRx Health security holders will own approximately 85% of the combined entity, while Better Choice security holders will retain 15%. Additionally, Better Choice will spin out 8% of its subsidiary, Halo, Purely For Pets, Inc., to its shareholders before the transaction’s effective time.
