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ASX infant formula group Wattle Health to raise $39.7 million in new shares

ASX infant formula company Wattle Health Australia Ltd (ASX: WHA) shares are closer to returning to market after the group’s latest announcement.

What did Wattle Health announce yesterday?

The Aussie group announced a new share offer to raise $39.7 million in new shares to fund its purchase of Blend and Pack.

Blend and Pack is an Australian dairy products processing and packaging group with a global client base. Wattle Health is seeking to acquire the group to improve its supply chain and penetrate the lucrative Chinese market.

According to yesterday’s announcement, the new Wattle Health shares will be offered at $0.40 per share. That’s a steep discount to the group’s $0.53 closing share price from Friday 27 September 2019.

The infant formula group’s shares haven’t traded since that date, as Wattle Health looks to tie up its Blend and Pack acquisition.

What else did the group announce yesterday?

The announcement of new Wattle Health shares wasn’t the only one from the group on Thursday.

Wattle Health will start selling its Uganic’s infant formula range across Chemist Warehouse’s retail network in March.

The group will also sell its Little Innoscents organic skin care range in Chemist Warehouse stores. Wattle Health issued 4,103,208 fully paid shares under the Chemist Warehouse agreement as per yesterday’s announcement.

It’s also been a busy few weeks for the ASX infant formula group with senior leadership changes taking effect.

The group appointed Dr Tony McKenna as the Group CEO and Managing Director on 13 January 2020. He replaces co-founder Lazarus Karasavvidis, who resigned from the board and stepped down from the CEO role.

This comes as the group looks to kickstart its growth and return to trading on the ASX. Wattle Health’s deal with Blend and Pack has been at a standstill as the group looked to raise the required capital under the terms of the deal.

Foolish takeaway

Wattle Health shares will certainly be worth watching when they return to trading on the ASX. There’s no indication just yet of when that will be, but it looks like wholesale changes are being made to facilitate the group’s growth going forward.

It’s been a big year for the sector with Bellamy’s Australia being snapped by up China Mengniu Dairy CompanyBubs Australia Ltd (ASX: BUB) and A2 Milk Company Ltd (ASX: A2M) have also enjoyed a strong 12-month period. 

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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