Freedom Foods to raise $156m to fund growth plans

Australia-based Freedom Foods plans to raise a capital of A$200m ($155.8m) to fund acquisitions to speed up its growth strategy and boost capacity.

Freedom Foods chief executive Rory Macleod informed the Australian stock exchange that the firm will provide its existing shareholders three full paid shares for every 29 shares at A$4.80 for every new share.

In addition, it will provide an institutional placement at this price.

With the two placements, the company intends to raise around A$100m each.

The A$200m it plans to raise will amount to almost 20% of its total market cap of A$996m, reported Nine.com.au.

Around A$120m is to be allocated as capital expenditure, while the remaining amount will be earmarked for ‘balance sheet flexibility for growth, including working capital requirements and potential acquisitions and alliances’.

Freedom Foods manufactures health foods, snacks and dairy products.

Earlier this month, the firm announced its plans to invest in three facilities to produce a range of high value-added nutritional products to cater to Asian and North American markets.

MacLeod told Nine.com.au: “Our key brands, Australia’s Own and Freedom Foods, will be at the forefront of driving our returns from our innovation and manufacturing capabilities in Australia and international markets.”

Freedom Foods’ shares were placed in a trading halt on Friday at A$4.94 and will resume trading on Tuesday morning next week.

The company expects its annual net sales to be from A$360m to A$380m for the fiscal year 2018, compared to A$262m across the last financial year.