AusCann has divested 52% of animal health specialist CannPal in a move it believes will unlock the potential of the business after two years of virtual hibernation.

A share sale agreement has been struck with CannPal founder Layton Mills to take the company back into private hands under a newly formed entity, Animal Health Holdings (AHH).

Layton Mills has reacquired the business he sold to AusCann in 2020

Mills, who sold CannPal to AusCann for A$17.5 million in November 2020 and became group chief executive in early 2021, is listed as a joint 50% shareholder of AHH, along with AusCann’s outgoing chief scientific officer Margaret Curtis.

Mills announced his departure from AusCann last September and most recently has been looking for love as a participant in TV reality show Married at First Sight.

AusCann will remain a 48% shareholder of CannPal although all current and future development and commercialisation expenditure will be borne by AHH.

In a statement to the ASX, AusCann said the acquisition of CannPal had been expected to accelerate the commercialisation of regulatory-approved human and animal health products to “offset headwinds resulting from the slower than expected uptake of the Special Access Scheme”.

However, amid plunging valuations in the cannabis sector and unresponsive capital markets, those plans were derailed.

The poor market conditions resulted in a business review and a decision to partially divest CannPal, it said.

“AusCann believes the proposed structure presents AusCann and its shareholders with the most upside… to unlock the future value of the CannPal assets while reducing any ongoing expenses and liabilities associated with the animal health business,” the company said.

“Specifically, AusCann believes that a privately held and focused animal health company is better positioned to attract, secure and maintain strategic partnerships and resources required for the continued development and commercialisation of AusCann’s animal health assets.”

AusCann has retained the rights to buy back the shares in CannPal for $1 should AHH fail to reach agreed development and commercial milestones.

AHH is currently in discussions with potential financial backers.                  

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...

Leave a comment