Bubs Australia Limited, the infant milk manufacturer, has reportedly entered into a conditional sales & purchase agreement for acquiring 100 per cent of Australia Deloraine Dairy, a multinational dairy company.
As per trusted sources, Bubs will acquire Deloraine for a cash consideration of around A$25 million, while 15.38 million shares of Bubs worth A$10 million are likely to be escrowed for up to 12 months at a strike price of A$0.65 per share. Sources added that Deloraine vendors would receive additional payments of about A$15 million, provided certain targets get accomplished, and the payments would be made in equal instalments every year, for the next 36 months.
Along similar lines, the company has also announced its latest fundraising from the China-based venture capital firm, C2 Capital Partners, with which Bubs has entered a private share placement at A$0.65 for each share, with an aim to raise around A$31.44 million. The placement is expected to involve the issue of as many as 43.37 million fully paid ordinary shares in Bubs Australia. Both the acquisition and the placement are slated to be concluded by the mid of April 2019.
Australia accommodates only around 15 licensed canning facilities that are authorized by the CNCA (Certification & Accreditation Administration of China) for the purpose of physical importation into China. Deloraine potentially is one of those 15 license holders.
If reports are to be believed, C2 is likely to acquire more shares in Bubs by means of off-market acquisition of shares from NuLac Foods Ventures, one of the current shareholders. Following the latest deal, C2 would be holding about 15 per cent in Bubs and the C2’s Managing Partner, Steve Lin, is likely to join in on the Bubs board as the Non-Executive Director.
For the record, Bubs and Deloraine had signed a manufacturing deal last year to manufacture Bubs® goat milk infant formula & Caprilac® goat milk powder products.