Better Choice Company has agreed to acquire the SRx Health Solutions pharmacy chain in an all-stock deal for approximately for US$125 million.

The deal is effectively a reverse takeover. It calls for SRx to become the majority owner of a combined public company that trades under the Better Choice name in New York.

Markham, Ont.-based SRx ranks among Canada’s largest specialty pharmacy operators with 35 specialty pharmacy locations, 40 specialty health/infusion clinics, four clinical-trial sites and two wholesale distribution facilities.

Tampa, Fla.-based Better is a pet health and wellness company. Better will continue to operate its portfolio of premium and super-premium pet products under its 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,” said the firm in a news release. “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 definitive agreement, SRx founders, management, board members and insiders will acquire about 75% of the combined company. Better will own 15%. In addition, Better will spin out 8% of the capital stock in its subsidiary Halto Purely for Pets to the parent company’s shareholders in the form of a dividend.

“This is a transformational acquisition for Better Choice,” said Michael Young, Better’s chairman.

Both the Better and SRX boards have approved the deal. Upon closing, Adesh Vora, the founder, president and CEO of SRx will become CEO of Better. Since launching SRx in 2013, he has grown the company from one store into a national, comprehensive healthcare provider.

Dave Sohi will be appointed president of Better. He currently serves as CFO for SRx.

Kent Cunningham, Better’s current CEO, will be appointed as CEO of the Halo business unit. Nina Martinez will retain her position as Better’s CFO.

The deal is expected to close in the fourth quarter of 2024.