Better Choice Company, Inc. (NYSE American: BTTR) has signed a binding Letter of Intent (LOI) to acquire 100% of Choice Specialty Pharmacy Group through an option purchase agreement, the company announced on March 11, 2025. The acquisition is expected to significantly strengthen Better Choice's specialty pharmacy footprint in the United States.
The deal is valued at approximately six times Choice Specialty Pharmacy's FY2024 Adjusted EBITDA of $4.68 million, with consideration to be comprised of both stock and cash at closing. This strategic move aligns with Better Choice's broader vision of expanding its healthcare services portfolio across North America.
"With the addition of Choice Specialty Pharmacy Group alongside our SRx platform in Canada, we are now executing on our strategy to build a healthcare services company with significant market share in North America," said Michael Young, Chairman of Better Choice. "Additionally, with the closing of Choice Specialty we will now have a sterile compounding facility in the U.S. and are well positioned to capitalize on strong industry tailwinds, leverage best practices of both companies and realize operating efficiencies."
Strategic Expansion into Specialty Pharmacy
Founded in 2015, Choice Specialty Pharmacy Group has established itself as a fully licensed provider across multiple states. The company offers a comprehensive range of services including specialty pharmacy operations, infusion clinic services, and maintains a sterile compounding facility—a particularly valuable asset in the specialized pharmaceutical services sector.
The acquisition represents a significant step in Better Choice's transformation from its origins as a pet health and wellness company. While the company continues to operate its pet nutrition business under the Halo brand, this latest move signals an accelerated pivot toward becoming a diversified healthcare services provider with cross-border operations.
North American Healthcare Services Strategy
The integration of Choice Specialty Pharmacy with Better Choice's existing Canadian SRx platform creates a substantial North American footprint in the specialty pharmacy space. This cross-border approach may provide operational synergies and expanded market access for the combined entity.
The specialty pharmacy sector has seen significant growth in recent years, driven by the increasing prevalence of complex chronic conditions requiring specialized medication management and the rising number of specialty drugs receiving FDA approval. These facilities typically focus on high-cost, high-complexity medications that require special handling, administration, or patient monitoring.
The sterile compounding capability that Choice Specialty brings to Better Choice is particularly noteworthy, as it allows for the creation of customized medications in sterile conditions—a highly regulated and specialized service that commands premium positioning in the pharmaceutical services market.
Financial Implications and Market Outlook
The acquisition terms value Choice Specialty Pharmacy based on its financial performance, with the $4.68 million Adjusted EBITDA figure representing unaudited calendar year 2024 results. Better Choice has indicated it expects to receive audited results from the seller after the closing of the option purchase agreement.
Industry analysts note that specialty pharmacy services typically generate higher margins than traditional pharmacy operations, potentially providing Better Choice with improved profitability metrics once the acquisition is fully integrated. The specialty pharmacy market is projected to continue its growth trajectory, driven by the pipeline of complex biologic and gene therapies entering the market.
"This marks an exciting step in our expansion strategy, and we look forward to further growing our presence in the U.S. market," Young added, suggesting that this acquisition may be part of a larger series of strategic moves in the healthcare services sector.
Better Choice Company has been undergoing a significant business transformation, leveraging its experience in health and wellness products while expanding into higher-margin healthcare services. The company maintains its pet health business, which focuses on nutrition-based approaches to pet health with sustainably sourced products under the Halo brand.
The transaction is expected to close following customary regulatory approvals and closing conditions, though specific timeline details were not disclosed in the announcement.
