Market Overview

$1.14B IPO For Chinese Baby Formula Company

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$1.14B IPO For Chinese Baby Formula Company

Baby formula maker China Feihe Ltd. has reportedly started accepting orders from investors for its initial public offering. The company will be listed on the Stock Exchange of Hong Kong (SEHK).

What Happened

Feihe is looking to raise up to $1.14 billion for its IPO. To achieve this, the baby formula producer is offering 893.3 million shares at HK$7.50 to HK$10 per share. These pricing figures infers that the company’s valuation is between $8.5 billion and $11.4 billion, according to the terms reviewed by Bloomberg.

The Beijing-based company will reportedly channel the proceeds from its IPO toward repayment of offshore debt, operation financing for a new production plant, and possible acquisitions.

Why it Matters

Feihe started constructing a plant in the City of Kingston, Ontario, Canada in 2017, where operations are expected to begin in 2020. It is reportedly the first facility of its kind in Canada, and the first facility for goat milk baby formula in North America. The facility, which will cover a 320,000 sq. ft. area reportedly required an investment of roughly $225 million.

This is the second time the baby formula company is seeking to go public in Hong Kong. In 2017, the company suspended a planned IPO because of merger issues. The company was also listed on the New York Stock Exchange between 2003 and 2013. It asked the NYSE to file a delisting request with the United States Securities Exchange Commission after a merger.

Since Feihe’s last attempt to list its shares in Hong Kong, its revenue has gone up 300%.

What’s Next

Feihe expected to stop accepting investor order on Nov. 5 ahead of a planned trading debut on Nov. 13. Bloomberg also reports that the offering has JPMorgan Chase & Co (NYSE: JPM), China Merchants Securities Co Ltd. (HK: 6099), and CCB International Holdings Ltd. as joint sponsors.

 

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Posted-In: Beijing China merger and acquisition NYSENews IPOs Global Media Best of Benzinga

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