Little Green Pharma is set to acquire distribution firm Health House Australia for a cut price A$1.25 million from Melodiol Global Health.
The WA cultivator and producer has signed a binding letter of intent to buy the business after Melodiol went into voluntary administration earlier this month.
Health House had originally been put up for sale at CAD$9.9m (A$10.9m) before offers of CAD$3m (A$3.3m) were invited.
LGP has until January 31 to conduct due diligence on an exclusive basis.
According to LGP, Health House is cash flow positive and generates annual revenue of $7.5m.
LGP chief executive Paul Long said: “This proposed acquisition represents a key milestone in LGP’s strategy to enhance our position as a market leader in the Australian medicinal cannabis sector.
“By integrating Health House’s operations with our existing capabilities, we can unlock significant synergies and deliver even greater value to our patients and stakeholders.”
The company added that it will bring “enhanced vertical integration capability while ensuring Health House can continue to operate as one of LGP’s key distribution partners”.
Health House, founded by well-known pharmacist Paul Mavor in 2016, has endured a rocky road in recent years, having been courted by Zelira Therapeutics in 2022 before Melodiol, then Creso Pharma, acquired the business for $4.6m later that year.
