- Milk-formula king Bubs Australia (BUB) has completed a $30 million share placement
- This is the first component of a capital raising initiative that will see an additional $5 million hit the bank in the near future
- The company said the fund raising is imperative to meeting one of Asia’s fastest growing consumer markets — the infant nutritionals sector
- Last month alone saw Bubs ink major expansions in Vietnam and China that warranted the capital boosting
- Bubs shares were divvied out at 95 cents each and will continue to be offered for Bell Potter Securities and PAC Partners
- Trading on the Australian market, shares in Bubs have devalued 7.48 per cent to trade for 99 cents each
Infant milk-formula company Bubs Australia (BUB) has completed the first leg of a capital raising, with $30 million in the bank today.
The company announced a $35 million capital raising on Thursday this week — a much-needed initiative to satisfy the Asian market’s demanding thirst of infant milk formulas.
Bubs has now completed the first leg of the raise — $30 million through a share placement.
The company offered shares at 95 cents each. This is a considerable steal compared to the company’s Thursday closing price of $1.07.
The remaining $5 million raise is expected to be contributed from existing investors in the company: Bell Potter Securities and PAC Partners. They will also have the chance to buy shares at 95 cents each.
“We are very pleased with the capital raising which investors share our vision, with a mix including our cornerstone and new institution long-only investors,” Bubs Executive Chairman Dennis Lin said.
Dennis, who assumed his position with the company this quarter, said the new funds will be used for unspecified acquisitions, product development, and further growth.
The boosted capital is much needed for the company as it has made several international expansions this quarter.
November alone saw two major expansions into Vietnam and China for Bubs, a matter of days apart.
“The strong level of support from new and existing investors is a terrific vote of confidence in the Bubs vision and we thank all who have made it such a success,” Dennis added.
This year alone has seen the Bubs share price gain over 132 per cent — climbing from as low as 45 cents at one point to peaks of $1.49.
“Following the placement, we will be well-positioned to continue to build on the operational momentum established during the year,” Bubs Founder and Chief Executive Kristy Carr said.
Kristy outlined that some of the most lucrative deals for the company have been stocking its products in retail stores made for mothers and children.
These are particularly popular in Asian countries such as China and Vietnam, benefitting off Australia’s agriculture sector.
“We have also enhanced our drive into the South East Asia region with the launch of the Bubs portfolio into the Vietnamese mother & baby store channel including the leading chain Bibomart,” Kristy said.
“In addition, we have plans of launching into other Asian markets including Hong Kong.”
Last month saw one of the company’s biggest expansions yet — stocking products on the globally popular Alibaba Chinese retail store.
According to Kristy, the Chinese toddler and infant nutritional market is valued in the billions.
Shares in Bubs today are valued at 99 cents each — degrading 7.48 per cent since market open.