Chinese dairy giant Yili will pay $588 million for dairy co-op Westland Milk, it was announced overnight.
The company exceeded the maximum fundraising of A$12 million with an oversubscription of A$15m, issuing 75m 20c shares, achieving a market cap on listing of A$30m.
The demand for shares has resulted in a scaling back for applicants.
Keytone Dairy promoted its share issue in Australia, New Zealand and Asia, attracting institutional investors, some already familiar with the powdered dairy market and others with no prior investments in the sector.
The funds raised will be used to expand the company’s manufacturing base beyond its existing plant, expand its product range and distribution, and develop distribution in other countries.
Managing director and chief executive James Gong says new plant will enable it to increase capacity and add new products to meet customer demand, including that from high-volume customers in China and other Asian countries.
The two new blocks of land are located in Izone, New Zealand’s largest industrial park about 15 minutes drive from the existing facility in Christchurch. The two adjacent blocks will enable Keytone Dairy to maximise economies of scale, a spokesman told Dairy News.
Construction has started at one of the sites.
The IPO process now means Keytone Enterprises (NZ) Company Ltd is 100% owned by the ASX-listed company Keytone Dairy Corporation Ltd.
Since 2014, Keytone NZ has used the Christchurch plant and has commercialised whole and skim milk powder and other dairy powder blends under its proprietary brands.
Keytone NZ also contract-packs powdered dairy products for major supermarkets, retail chains, dairy producers and other customers in New Zealand and China under their private label brands.
Keytone NZ’s products are exported globally, including to China, for sale in a variety of channels, including major supermarket chains, premium retail channels and online marketplaces. The facility holds a China Certification and Accreditation Administration (CNCA) import licence.
Keytone NZ’s customers and distribution channels include New World, Pak’nSave, Countdown, Dairyworks NZ, Metro, Guangzhou Dept & Friendship Store, HalsoKraft, JD.com, Tmall.com and VIP.com.