Bubs Australia has completed a share placement, raising $28.3 million to go towards its expansion into China. The institutional placement was heavily oversubscribed, with shares priced at $0.80 per share.
Bubs said several new institutional and sophisticated investors from Australia and overseas joined existing institutional shareholders in the placement.
Company chair Dennis Lin said: “It is a terrific vote of confidence in Bubs. This shows institutional and sophisticated investors continue to strongly support our vision.”
It has announced a share purchase plan (SPP), which will allow eligible shareholders to apply for up to $30,000 of new fully paid ordinary shares at $0.80 per SPP share.
The SPP aims to raise up to $10 million, or a maximum of $11.7 million.
Bubs founder and CEO Kristy Carr said the company’s first priority will be to progress its strategy to accelerate SAMR registration for China manufacture of Bubs Goat Infant Formula made from 100 percent Australian goat milk.
Last month the company announced a Memorandum of Understanding (MOU) with its joint venture partner Beingmate for the China-based manufacture. The MOU gave Bubs the opportunity to buy into one of Beingmate’s manufacturing facilities.
Last year the China State Administration of Market Regulation (SAMR) announced plans to strengthen the domestic formula market. Its goal was to increase domestic supplies to more than 60 per cent of the market.
Carr said: “This ‘Created by Bubs’ localisation strategy is capable of replication into other markets with similar barriers to entry.
“We are now well positioned to maintain the operational momentum, strength and agility established during the year, to execute on strategy, and capture new opportunities while ensuring we continue to implement key marketing strategies that respond to the challenges of the current macro environment, including consequences of COVID-19.”
The proceeds of the Placement and SPP will also be used to:
- support the launch Vita Bubs into the high margin adjacent Vitamin and Mineral Supplements category;
- accelerate brand equity build leveraging Jennifer Hawkins, Bubs Global Brand Ambassador;
- new product innovation in emerging high value goat dairy segments, extending production capability to include a production line for single-serve sachets; and
- global market expansion into new markets.
