Better Choice Stock Slips After Agreement To Sell Asia Business: Retail's Optimistic

synopsis

Shares of Better Choice Company ($BTTR) were down 5.8% on Tuesday after the pet health and wellness company said it had agreed to sell its Halo business in Asia to its existing partner CZC Company, but retail sentiment stayed bullish.

Better Choice signed a non-binding term sheet to sell the business for $6.5 million in cash at closing, along with a 3% royalty on sales over the next five years, guaranteed by a minimum royalty payment of $330,000 per year or $1.65 million in total, the company said.

Following the deal, Better Choice will retain ownership of its significant North American and remaining operations. CZC Company has paid a $500,000 non-refundable deposit to Better Choice as part of the transaction.

Sentiment on Stocktwits seemed bullish but one commenter questioned the terms.

“This sale will further strengthen our balance sheet and allow us to further concentrate on growing our North American and global operations," Michael Young, chairman of Better Choice, said. "The deposit and agreement draft demonstrate the buyer’s commitment to close on the transaction in a timely manner. We look forward to keeping shareholders informed as we continue to execute on our strategic plans, including updates on our previously announced transaction with SRx Health Solutions Inc. and future growth initiatives.”

Better Choice sells dog food, cat food and treats under the Halo brand, focusing on sustainably sourced kibble and canned food derived from real whole meat, and minimally processed raw-diet dog food and treats.

Better Choice stock is down 3% year-to-date.

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