Grey Wolf Animal Health has acquired the Compounding Pharmacy of Manitoba (CPM) for $22.5 million.

The deal, which includes a 25,000-square-foot facility and associated land, strengthens Grey Wolf’s presence in the veterinary and human compounding pharmacy markets, said the company. Grey Wolf is a diversified Canadian health company based in Toronto.

“We believe CPM is complementary to our Trutina acquisition that we completed in 2021 and provides the ability to expand our existing business in both the veterinarian and human compounding pharmacy markets from a new facility near Winnipeg,” said Angela Cechetto, Grey Wolf’s CEO.

Located in Oakbank, Man., CPM is a leading independent compounding pharmacy serving veterinarians and both corporately owned and independent pharmacies across Canada. For the trailing 12 months ending September 30, 2024, CPM reported revenues of approximately $6.4 million and an adjusted EBITDA of $2.5 million.

Grey Wolf said it acquired all outstanding shares of CPM for $22.5 million under a share purchase agreement. The purchase price, excluding the real estate’s appraised value, represents approximately seven times CPM’s Adjusted EBITDA for the trailing 12 months.

The transaction was funded through a combination of $19.8 million in cash—financed via cash on hand and two new five-year term loans totalling $18.7 million—and $2.7 million in Grey Wolf common shares issued to the sellers. The 3,160,112 shares are subject to a one-year voluntary lock-up.

The loans, provided by Canadian Western Bank’s CWB Maxium Financial, carry a 7.09% interest rate. Term Loan 1, valued at $14.3 million, is amortized over 12 years, while Term Loan 2, at $4.4 million, is amortized over 25 years and facilitates the purchase of the land and building.

Strategic Benefits

The acquisition is expected to:

• Provide increased scale and capacity for growth in Grey Wolf’s pharmacy business;
• Diversify its customer base, ranging from independent pharmacies to veterinarians.
• Expand Grey Wolf’s human compounding product offerings;
• Be immediately accretive to revenue, Adjusted EBITDA, and earnings per share.

Grey Wolf said the addition of CPM complements the parent company’s existing strategy to bring innovative prescription and non-prescription healthcare products to market.

The acquisition reflects Grey Wolf’s ongoing focus on expanding its market presence while meeting the growing demand for quality compounding pharmacy services, said the company.

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