Infant-formula manufacturer Bubs Australia announced it has raised AUD30m (US$20.5m) through a share placement to fund future acquisitions and new product development.
The Sydney-listed business said the shares were acquired by both domestic and international investors and were offered at 95 Australian cents each. Settlement is set for 11 December and the shares will start trading on the Australian Securities Exchange on 16 December.
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Bubs also intends to offer a share purchase plan for another AUD5m at the same price.
Chairman Dennis Lin said the funds will be used to “improve the company’s flexibility to take advantage of future growth opportunities, accelerate customer acquisition in existing and new markets, advance new product developments and meet M&A commitments”.
Bubs founder and chief executive Kristy Carr suggested the company, which specialises in goat’s milk formula, will expand its product development into new categories. It also supplies cow’s milk formula, rusks, cereals, and vegetable and fruit-based snacks, with China a key market.
She continued: “Following the capital raising, we intend to take advantage of increased data-driven marketing initiatives for the Bubs’ portfolio across our e-commerce and 020 channels, aligning ourselves with partners that are focused on data to maximise efficiency and targeting of key demographics.
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By GlobalData“We will also be developing an innovation pipeline to expand our reach into segments beyond infant formula and toddler nutritionals to the $1 billion per annum Chinese junior four- to seven-year old nutritionals market, and into expanding goat-dairy brands to cater for a growing market for science-based adult formulations.”
Bubs announced last month it had expanded its presence in Asia with entry into Vietnam through a distribution deal and also signed an agreement with Chinese e-commerce giant Alibaba to sell the firm’s adult goat dairy products. And during the summer, Bubs entered another deal in China, with baby products retailer Kidswant, established through its new joint venture with China’s Beingmate Baby & Child Food Co. – Bubs Brand Management Shanghai Co.
