Bullish indicating open at $55-$60, IPO prices at $37
TAMPA, Fla. - Better Choice Company Inc. (NYSE American: BTTR), a pet health and wellness firm with annual revenues of $35 million, has announced a key financial maneuver in its acquisition of SRx Health Solutions, Inc., signaling a consolidation in the health and wellness sector. The transaction involved SRx Health converting CAD$4 million of debt into equity, a move that Chairman Michael Young believes will fortify the merged entity without affecting Better Choice’s share count. According to InvestingPro data, the company currently holds more cash than debt on its balance sheet, with a healthy current ratio of 2.1.
This corporate action comes as the two companies prepare to finalize their merger, expected to be completed by late April. The resulting entity is poised to become a prominent player in the global health and wellness market, focusing on products and services for pets, people, and families. Trading at a notably low Price/Book multiple of 0.35, Better Choice appears undervalued based on InvestingPro’s Fair Value analysis.
Better Choice has a history of offering alternative, nutrition-based pet health solutions, while SRx Health is recognized in Canada for its comprehensive healthcare services, particularly in the specialty pharmacy arena. SRx’s expertise spans patient support programs, infusion clinics, retail pharmacies, and clinical trials, with an expansion strategy to increase its specialty pharmacy locations from 34 to 100 across Canada.
The strategic partnership and the impending merger underscore Better Choice’s ambition to leverage SRx’s capabilities and extend its reach in the growing market for health and wellness solutions. The deal aims to enhance product distribution and accessibility, especially in the niche market of chronic and rare diseases.
Better Choice’s commitment to sustainability and health is reflected in its Halo brand, which emphasizes sustainably sourced and minimally processed pet foods. SRx Health’s focus on integrated healthcare solutions complements this approach, aiming to simplify healthcare delivery on a broader scale.
With the merger on the horizon, stakeholders are anticipating the emergence of a strengthened company with a broader scope of services and a reinforced financial structure. While InvestingPro analysis reveals the company is currently burning through cash and not profitable over the last twelve months, analysts anticipate sales growth in the current year. For deeper insights into Better Choice’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers. This news is based on a press release statement from Better Choice Company Inc.
In other recent news, Better Choice Company Inc. reported its financial results for the fourth quarter of 2024, showing a significant improvement in its net loss. The company reported a net loss of $168,000, a dramatic improvement from the $23 million net loss in the previous year. Despite a 9% decline in annual net revenues to $35 million, Better Choice increased its gross profit margin by 650 basis points to 37%. The Halo brand saw a 26% increase in revenue for the fourth quarter year-over-year, driven by strong performance on digital platforms like Amazon and Chewy. Better Choice also announced plans to acquire SRx Health in April, aiming to enhance its position in the global health and wellness market. Additionally, the company plans to sell Halo Asia for $8.1 million, which includes cash proceeds and future royalty payments. In terms of analyst activity, no recent upgrades or downgrades were mentioned. Better Choice’s strategic focus on operational efficiency and profitable channels has resulted in an improved adjusted EBITDA loss, which decreased by 78% to $1.9 million.
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