Partnership turns sour: Better Choice takes Alphia to court
Florida-based Better Choice started legal proceedings against American pet food manufacturer Alphia less than a year after investment.
The 2 companies entered a strategic long-term partnership last year in which Alphia invested $5 million (€4.58M) in the pet health and wellness company and became the manufacturer of Better Choice’s premium pet food brand Halo.
However, since the deal was announced, it appears that Alphia, which is controlled by Paris-based equity firm PAI Partners, has not closed the sale.
“PAI and Alphia negotiated with Better Choice Company in good faith and in compliance with all legal obligations but decided it was not in the best interests of the company or their investors to pursue this acquisition,” reads a statement shared with GlobalPETS.
Right of refusal
Better Choice decided to exercise the right of first refusal (ROFR)—a contractual right that gives its holder the option to match or refuse the offer on an asset before the owner can sell it.
The company states that according to the terms of the written agreement, Alphia is “obligated” to acquire the assets of Better Choice subsidiary Halo.
Better Choice wishes to “compel the closing of the asset sale” or seek monetary damages of more than $19 million (€17.8M) caused by Alphia “for its misconduct in connection with the ROFR.”
Better Choice posted net sales of $38.6 million (€36.3M) in 2023 and improved its gross margin by 31%.
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