LSL Pharma completes acquisition of Laboratoire Du-Var

Executive Summary

• LSL Pharma Group Inc. has completed the acquisition of Laboratoire Du-Var Inc., a contract manufacturer of cosmetics and natural health products established in 1947.
• The acquisition significantly expands LSL Pharma’s production capacity, more than doubling its capacity for liquid and semi-solid products and adding 30,000 square feet of modern manufacturing infrastructure.
• The transaction is expected to be accretive, increase CMO segment revenues by more than 25%, and provide access to new markets in natural health, cosmetics, personal care, and pet care.

Key Details

• Transaction Structure: Completion of the acquisition of Laboratoire Du-Var Inc.
• Effective Date: November 17, 2025.
• Consideration: Total consideration included the renewal of Du-Var's operating line of credit, term loan, and certain liabilities, totaling a maximum of $3.2 million.
• Target Financials (12 months ended Aug 31, 2025):
  • Revenues: $4.4 million.
  • Adjusted EBITDA: $500,000.
• Target Balance Sheet (As of Aug 31, 2025):
  • Total Assets: $6.9 million.
  • Total Liabilities: $5.1 million (including bank loans of $3.0 million).
• Operational Impact:
  • Adds 30,000 square feet of production capacity.
  • More than doubles production capacity for liquid and semi-solid products.
  • Expected to increase CMO segment revenues by more than 25%.
  • Provides access to new markets in natural health products, cosmetics, personal care, and pet care.
• Strategic Context: Part of LSL Pharma’s plan to build an integrated pharmaceutical, cosmetic, and natural health products manufacturing hub in Canada.
• Integration Status: Management has been working with Du-Var’s team for several months to ensure a smooth transition; the company expects the transaction to be accretive once fully integrated.

Notable Quotes

• "This acquisition marks another important milestone in LSL Pharma's growth. It not only allows us to significantly increase our production capacity for liquid and semi-solid products, but also to diversify our offering and attract new customers in segments that complement our core businesses," said Francois Roberge, president and chief executive officer of LSL Pharma.
• "Du-Var enjoys a solid reputation and its expertise has been recognized for over 75 years. We are delighted to welcome its team to LSL Pharma," he added.