US pet-food manufacturer Alphia has invested $5m in Better Choice, a pet health and wellness company.
The investment has struck up a partnership between Denver-headquartered Alphia and New York-based Better Choice which will involve the former becoming the manufacturer of Halo, Better Choice’s flagship dog- and cat-food subsidiary and brand.
The $5m injection will also eliminate the debt held by Halo, which had been linked to a potential sale in March. Halo offers a range of kibble, canned food, freeze-dried raw dog-food, treats, vegan dog-food, oral care products and supplements.
Better Choice wrote in a statement that the improved debt conditions, coupled with a “promising cash flow management plan” will support the company’s path to profitability.
“Solidifying a long-term manufacturing relationship with Better Choice is in line with Alphia’s vision to nourish & protect pets every day, creating a lasting impact with brand partners that share our views on safe, high quality pet-food” said David McLain, CEO of Alphia.
“We respect the Halo brand, and look forward to fuelling their growth to feed more pets.”
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Michael Young, chairman of Better Choice, said: “We look forward to working with Alphia, leveraging their investment and deep knowledge of the pet-food manufacturing marketplace.
“Alphia and Better Choice’s multi-year manufacturing partnership will positively impact our brand, Halo and the millions of people who choose our products for their pets,” he added.
Shortly after the Halo brand gathered interest from potential buyers in March, Better Choice released its financial results for its fiscal 2022 which indicated a 19% jump in net sales to $54.7m, but an operating loss of $38.8m. The group returned EBITDA losses of $11.8m for the year.
Last September, Scott Lerner stood down from the CEO role at Better Choice and then-director Lionel Conacher filled in as interim chief executive up until last month, when Kent Cunningham – who held previous roles at Mars Petcare – took the permanent position.
Meanwhile, Alphia was reportedly linked to a sale of the business last month, being valued at more than $1bn. Reuters reported that the private equity-owned white-label manufacturer was working with investment bank Goldman Sachs on a potential deal.
Alphia, which is owned by Connecticut-based J.H. Whitney & Co, was formed out of the merger of pet-food manufacturers C.J. Foods and American Nutrition in 2020. It makes kibble, treats and canned food for third parties and also owns ingredients company Lani.