Mr. Francois Roberge reports

LSL PHARMA GROUP ENTERS INTO NON-BINDING AGREEMENT TO ACQUIRE A QUEBEC-BASED COMPETITOR

LSL Pharma Group Inc. has entered into a letter of intent (LOI) to acquire a privately held, Quebec-based competing contract manufacturer specialized in the formulation and production of liquid and semi-solid natural and cosmetic products (Target Co.). Target Co. and its shareholders are at arm's length with LSL Pharma.

• Transaction expected to add $8-million to $10-million of revenues, expand capacity and service offering;
• Transaction is highly complementary and will enable significant synergies;
• Closing expected to take place in Q3 2025.

Total consideration for the acquisition will range between $3-million and $3.3-million, and involves a nominal cash payment as well as assumption of Target Co.'s bank debt. The cash portion will be financed by the proceeds from the recently announced bank financing. The transaction will enable LSL Pharma to realize material gain on acquisition. Once fully integrated, the transaction is expected to increase LSL Pharma's revenues by more than 20 per cent on an annual basis by contributing $8-million to $10-million to its consolidated revenues. LSL Pharma anticipates closing the transaction by the end of Q3 2025.

Target Co. is based in the province of Quebec, manufactures and packages liquid and semi-solid products for the Canadian and international markets. The acquisition of Target Co. is highly complementary to LSL Pharma's other contract development and manufacturing operations (CDMO), and will help strengthen existing client relationships as well as expand capacity and service offering.

"Following the highly successful acquisition of Virage Sante and Dermolab Pharma last year, we look forward to executing this additional transaction to further expand our CDMO operations, manufacturing capabilities and customer base as more and more Canadian companies are looking for local solutions to their supply chain requirements," said Francois Roberge, president and chief executive officer of LSL Pharma. "Target Co. has an excellent reputation as a contract manufacturer. We expect this transaction to be accretive once fully integrated, to generate significant synergies with our existing operations as well as leverage our head office infrastructure," added Mr. Roberge.

About LSL Pharma Group Inc.

LSL Pharma Group is a Canadian integrated pharmaceutical company specializing in the development, manufacturing and commercialization of high-quality sterile ophthalmic pharmaceutical products, as well as pharmaceutical, cosmetic and natural health products in solid, semi-solid and liquid dosage forms. Companies forming part of LSL Pharma Group are Steri-Med Pharma Inc., LSL Laboratory Inc., Virage Sante Inc. and Dermolab Pharma Ltd.

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