WHA Securities Under Suspension Due To Proposed Acquisition Of Majority Stake In B&P

The shares of Wattle Health Australia Limited (ASX: WHA), food and beverage company from the Consumer Staples sector was today on 3 May 2019 was suspended from the quotation immediately under Listing Rule 17.2 pending the release of an announcement related to the proposed acquisition of the majority stake in Blend and Pack.

The company announced that the shares of WHA would remain suspended until the earlier of commencement of normal trading on 8 May 2019 or whenever the announcement of the proposed acquisition of the majority stake in Blend and Pack releases.

On 11 February 2019, the company had entered into a conditional purchase agreement with 100% owned subsidiary of Mason Holdings Limited (Mason) to purchase an additional 46% of the largest independent nutritional dairy manufacturer of Australia, Blend & Pack (B&P) for $46 million along with undistributed earnings.

Blend & Pack is into the business of nutritional dairy processing and packaging business and has a long history of profitability. The proposed acquisition was intended to be funded by debt issue and would be managed by an international advisory firm, Exotic capital.

As per the terms and condition of the proposed acquisition, WHA was also to enter into the call and put option deed in order to acquire a further interest of 29% in B&P at base purchase amount of $30.1 million. The total assets with the WHA group post the acquisition of B&P will be around $165 million.

On 15 April 2019, the company provided an update related to the proposed transaction where after the extensive global marketing process, various significant international funds had entered into a non-disclosure agreement and were in active discussion with the company and Exotic as they completed the process of investor due-diligence.

The management presentation, as well as the investor site tours, was scheduled on 19 April 2019 where multiple parties travelled to Australia with an intent to execute the definitive terms. Meanwhile, the company was working actively to fulfil all the condition for finalizing the transaction along with the new shareholders agreement and notice of meeting.

The company will be releasing the notice of meeting by 10 May 2019, and the planned meeting is scheduled on 13 June 2019. Also, both the parties, WHA and Mason have entered into an Amendment to the purchase agreement and have extended the completion date to June 15, 2019.

During the March 2019 quarter, the company also finalized the supply agreement with International Supplies and Distribution Co for supplying dairy baby formula into the China market that depends on SAMR approval.

There was also an appointment of a non-executive director to the board of Wattle Health Australia Limited. Dr Tony Mckenna was selected as the CEO of Corio Bay Dairy Group. The company used A$1,569,987 in its operating activities and A$3,598,493 through investing activities. By the end of the March 2019 quarter, the net cash and cash equivalent with Wattle Health Australia Limited was A$36,979,412. The estimated cash outflows for next quarter stands at $6,400,000.

Since its inception, the company has generated an excellent return of 290.79%. The shares of Wattle Health Australia Limited traded last on 30 April 2019 with the closing price of A$0.755. Wattle Health Australia Limited holds a market capitalization of A$146.85 million and approximately 194.5 million outstanding shares.


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