Bubs Australia, one of the country’s largest producers of goat milk products, plans to buy infant formula producer Australia Deloraine Dairy, one of only 15 lisenced canning facilities in Australia that meets regulatory import conditions into China.
Under the reported terms, Bubs will pay $25 million in cash plus $10 million in Bubs shares, with further payments of up to $15 million to be made if certain targets are met.
Deloraine is one of the few canning facilities in Australia authorised by the Certification and Accreditation Administration of China (CNCA) for physical importation into the country under regulatory requirements administered by State Administration for Market Regulation (SAMR).
Bubs Australia founder and chief executive officer Kristy Carr said the acquisition is a “win-win all round – for Bubs and Deloraine’s customers, suppliers, relationship partners and employees alike".
Carr said the acquisition will put Bubs in the best possible position to achieve SAMR brand registration and will enable the company to export infant formula products to China to be sold in physical Mother and Baby stores.
Bubs already has a five-year manufacturing agreement with the Dandenong-based Australia Deloraine Dairy and by acquiring it, Bubs will see a material reduction in production costs.
“This is a key foothold in Bubs vertical-integration strategy to maximise control of our supply chain and represents an important step in our vision to expand our China business,” Carr said.
