- Acquisition is accretive, expected to boost revenues by
approximately 40% and adds development and manufacturing
capabilities of liquid and semi-solid products for the
pharmaceutical and cosmetic markets.
- The Corporation strengthens its management team with the
appointment of Guy Paul Allard as VP
Legal Affairs and Corporate Secretary.
BOUCHERVILLE, QC, Dec. 18,
2024 /CNW/ - LSL PHARMA GROUP INC. (TSXV: LSL,
LSL.DB) ("the Corporation" or "LSL Pharma"), a Canadian integrated
pharmaceutical Corporation, is pleased to announce the acquisition
of Dermolab Pharma Ltd. ("Dermolab"), a contract manufacturing
company specializing in the manufacturing of liquid, and semi-solid
products, based in Ste-Julie,
Quebec. This acquisition increases LSL Pharma's contract
development and manufacturing activities, while creating synergies
with its other subsidiaries, LSL Laboratory Inc., Steri-Med Pharma
Inc. and Virage Santé Inc. LSL Pharma also announced the closing of
a $2 million concurrent debt
financing (the "Financing"). The closing of the transaction
occurred after markets had closed on December 17, 2024.
Details about the Dermolab Transaction
The total consideration for the transaction includes (i)
the renewal of Dermolab's operating line of credit and term loan
totaling a maximum of $3 million and
(ii) a cash payment of $955,000 on
closing. The cash portion of the purchase price was financed by the
proceeds of the concurrent debt financing and will be subject to
post-closing adjustments. For the 12-month period ended on
August 31, 2024, Dermolab generated
net earnings and net earnings before interest taxes and
amortization (EBITDA) of nil and $0.5
million respectively, from revenues of $10.1 million. As at August 31, 2024, Dermolab had total assets of
$7.9 million, and liabilities of
$5.3 million including bank loans
totaling $2.7 million. The
acquisition is expected to boost LSL Pharma's revenues by
approximately 40% for the upcoming fiscal year. The acquisition is
also expected to broaden Dermolab's customer base which will
benefit from the LSL Group's expanded service offering.
Robert Boisvert, Dermolab's prior
President has been retained for an interim period to ensure a
smooth transition.
"We are excited about the opportunity to add Dermolab to our
contract manufacturing division. This acquisition fits with LSL
Pharma's growth strategy of diversifying its service offering and
increasing its manufacturing capabilities to better serve the
pharmaceutical sector, as well as to expand our activities to the
cosmetic market", said François Roberge, President and CEO.
"By leveraging the management talent and expertise of its
seasoned staff, we expect Dermolab to operate as a standalone
entity as part of our group. We look forward at the opportunity to
continue building Dermolab into a dominant player in the
development and manufacturing of high-quality creams and liquids
for the Canadian, US and European pharmaceutical and cosmetic
markets. Finally, we are especially thankful for the support of the
departing President, Robert
Boisvert, who has been at the helm of the Corporation for
the last 20 years", concluded Mr. Roberge.
About the Financing
Concurrent to the Transaction, LSL Pharma successfully completed
a $2 million Notes offering (the
"Notes"). $1 million of such Notes, results from the
amendment of an existing note entered into on November 19, 2024 with a non-related party as
disclosed in the Corporation's November 25,
2024 press release. The Notes are unsecured, bear interest
at a blended rate of 13% and mature on January 1, 2028. 2,000,000 warrants (the
"Warrants") were issued in connection with the Notes, with each
Warrant entitling the holder, subject to adjustments in certain
cases, to purchase one common share of the Corporation (the
"Warrant share") at a price equal to the greater of (i)
$0.70 or (ii) the closing price of
the LSL Pharma Shares on December 20,
2024 , for a period of 36 months following the closing of the
Financing. The Notes may be redeemed by the Corporation at any
time on or after January 1, 2026.The
purpose of the Financing was to support growth initiatives, such as
the Dermolab acquisition, by strengthening LSL Pharma's working
capital.
Each Warrant and Warrant share will be subject to a four-month
hold period under the applicable securities laws. The Financing is
subject to the TSX Venture Exchange's approval. There were no
finders involved with the Financing.
A Corporation controlled by Luc
Mainville, Executive VP and Chief Financial Officer of the
Corporation (the "Insider") contributed an amount of $1 million into the Financing. The participation
of the Insider in the Financing and the issuance of Warrants to the
Insider constitute "related party transactions" as defined under
Multilateral Instrument 61-101 Protection of Minority Security
Holders in Special Transactions ("MI 61-101"). The Corporation is
exempt from the need to obtain a formal valuation and minority
shareholder approval, as required by MI 61-101 in respect of such
insider participation the Financing, since the Notes
are deemed to create a new loan, and such loan is on
reasonable commercial terms that are not less advantageous to the
Corporation than if the loan was obtained from a person dealing at
arm's length with the Corporation. Furthermore, the loan is not
convertible, directly or indirectly, into equity or voting
securities of the Corporation or a subsidiary, or otherwise
participating in nature, or repayable, as to principle or interest,
directly or indirectly, in equity or voting securities of the
Corporation or a subsidiary. The Corporation is also exempt
from the need to obtain a formal valuation and minority shareholder
approval for the issuance of Warrants to the Insider because the
fair market value of the Warrants does not exceed 25% of the
Corporation's market capitalization. A material change report in
respect of these related party transactions will be filed by the
Corporation.
Appointment of Guy Paul
Allard
The Corporation also announced today the appointment of
Guy Paul Allard as Vice President,
Legal Affairs and Corporate Secretary. A seasoned lawyer
specializing in corporate and securities law for over 25 years, Mr.
Allard has practiced in national and global law firms and has
previously held similar executive in-house positions in the
pharmaceutical industry. "The Corporation's growth requires the
addition of specialized legal resources internally and we are
pleased to welcome Guy Paul in our
management team", said Mr. Roberge.
ABOUT DERMOLAB PHARMA LTD.
Founded in 1985, Dermolab Pharma operates a 50,000 sq.ft. plant,
employs 85 staff, and specializes in the development, manufacturing
and packaging of liquid and semi-solid cosmetic, pharmaceutical and
natural health products. The Corporation serves both the Canadian
and international markets and its manufacturing operations meet the
Food and Drug Administration (FDA) and Health Canada standards.
For more information on Dermolab Pharma, please visit
www.dermolabpharma.com.
ABOUT LSL PHARMA GROUP INC.
LSL Pharma Group Inc. is a Canadian integrated pharmaceutical
Corporation specializing in the development, manufacturing, and
commercialization of high-quality sterile ophthalmic
pharmaceuticals, as well as natural health products in solid and
liquid dosage forms. For further information, please visit
www.groupelslpharma.com.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements as
defined under applicable Canadian securities legislation.
Forward-looking statements can generally be identified by the use
of forward-looking terminology such as "may", "will", "expect",
"intend", "estimate", "continue" or similar expressions.
Forward-looking statements are based on a number of assumptions and are subject
to various known and
unknown risks and uncertainties, many of which
are beyond the Corporation's ability
to control or predict,
that could cause actual results
or performance to differ materially from those expressed or implied in such
forward-looking statements. These risks and uncertainties include,
but are not limited to, those identified
in the Corporation's filings
with Canadian securities regulatory authorities, such as legislative or regulatory
developments, increased competition, technological change and
general economic conditions. All forward-looking statements made
herein should be read in conjunction with such documents.
Readers are cautioned not to place undue reliance on
forward-looking statements. No assurance can be given that any of
the events referred to in the forward-looking statements will
transpire, and if any of them do, the actual results, performance
or achievements of the Corporation may differ materially from those
expressed or implied by the forward-looking statements. All
forward-looking statements contained in this press release speak
only as of the date of this press release. The Corporation does not
undertake to update these forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture
Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Groupe LSL PHARMA INC.
