Australian cereal and snacks maker Freedom Foods is to buy its smaller rival Popina and build a new processing plant.
The company is tapping its shareholders for $53.4 million via a heavily discounted 4-for-33 rights issue. Another $12m will be raised via a placement, with a total of 22.9m shares issued under the deal.
The capital raising exercise came as Freedom Foods gained $28 million from selling its stake in New Zealand’s a2 Milk, reducing its holding from 19% to just over 10%.
The new funds will enable Freedom Foods to buy Victoria-based cereal and snacks maker Popina in a $35 million deal that will allow expansion of its manufacturing operations. Freedom Foods also plans to construction of a new UHT processing facility in Sydney.
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