The Bubs Australia Ltd (ASX: BUB) share price has been a strong performer in March, rising a sizeable 43%.
But it won't be going anywhere on Friday after the goat milk infant formula and baby food company requested a trading halt.
Why is the Bubs Australia share price in a trading halt?
According to its request, Bubs requested the trading halt whilst it prepared an announcement in relation to a proposed acquisition and an associated proposed capital raising.
The company has requested that its shares remain in the trading halt until the earlier of the commencement of normal trading on April 2 2019 and when the company makes its announcement to the market.
Considering its strong share price rise this month, this certainly appears to be an opportune time for the company to make this move.
What is Bubs Australia planning to acquire?
No details have been provided as of yet in respect to what Bubs is intending to acquire.
It is hard to see where else the company could add value to its business after its recent strategic partnership with Bega Cheese Ltd (ASX: BGA) subsidiary Tatura.
One possibility, though, is through the acquisition of a canning facility. The company currently has a 5-year manufacturing agreement with Dandenong-based food company Deloraine. Perhaps it could be the target.
Should you buy Bubs Australia shares?
Whilst I think that Bubs has a lot of potential due to its unique offering, at this stage there is still a long way to go until it is challenging the likes of A2 Milk Company Ltd (ASX: A2M) and Bellamy's Australia Ltd (ASX: BAL).
In light of this, I would suggest investors keep their powder dry and see how the company's sales and margins grow over the next 12 months.
