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A2 Corp raises $5.18M in placement with assistance from AMP Capital NZ

Tuesday 13th March 2012

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A2 Corp, which licenses techniques to identify milk with a protein variant claimed to have health benefits, is raising $5.18 million in a share placement to fund a joint venture targeting growth in the UK and Ireland.

The capital raising is via a placement of 14 million shares at 37 cents apiece to AMP Capital Investors (New Zealand). As part of the arrangement, AMP Capital is “facilitating” the sale of A2 shares to other institutions on the same terms, the company said in a statement today.

The shares dropped 5 percent to the placement price of 37 cents today, having traded at a record 39 cents yesterday. The stock has surged 164 percent in the past 12 months and now valued the company at around $219 million.

The stock has been rerated as it has lifted sales and expanded in Australia. Last month, A2 posted a 56 percent jump in first-half sales, helping boost profit to $3.1 million from $894,000.

“The company has been moving forward significantly on new initiatives over the last two to three years,” said managing director Geoffrey Babidge. “The Australian business has been growing exponentially, we’ve announced the sales and marketing JV into the UK and Ireland and we had a strong result in February.”

AMP Capital holds about 14 percent of the stock, according to its last disclosure and the distribution of shares to other institutions will keep its holding unchanged, A2 said today.

In November, the company announced a sales and marketing JV with Robert Wiseman Dairies, one of the largest fresh milk suppliers in Britain. The two companies are each putting up 2 million pounds for the venture.

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