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By-health to raise cash
Posted on Friday, 26 June 2020 13:49
By-health is raising CNY 3.61 billion (USD 509.62 million) to support its overriding strategy of becoming a leading player in China’s dietary supplement market. The nutritional supplement manufacturer is selling up to 160.00 million new shares, representing a 9.2 per cent post-issue stake, to no more than 35 specific investors. Zephyr, the M&A database published by Bureau van Dijk, shows this capital increase is the 13th largest targeting the global pharmaceutical, biotechnology and life sciences sector so far this year. WuXi AppTec accounts for the biggest after announcing plans to raise USD 1.70 billion, while Moderna is next with a fully underwritten public offering worth up to USD 1.25 billion. By-health introduced its vitamin and dietary supplements to the market in 2002 and has since grown into a self-proclaimed leading brand in the country, according to its website. The group imports raw materials from 23 countries and has five exclusive supply bases in countries such as Brazil and Australia, though it is also building its own organic farms. According to the announcement, the average penetration rate of dietary supplements in China is about 20.0 per cent, which is lower than that of the US, where the average is roughly 60.0 per cent. This means the market in the country has some significant growth potential. By-health is using proceeds from the cash call to continue bolstering its cross-border e-commerce platforms, and build its international business scale by increasing capacity to fully meet demand, particularly in Australia. The company intends to establish a dietary supplement raw material extraction centre and supplement manufacturing facility that will make use of an automated production line. it is also buying land in Melbourne to turn existing infrastructure into a probiotic and dietary supplement-focused plant. Money raised will also improve the group’s digital information system across the whole chain, from providing quality services and meeting marketing strategies, to supporting production and supply. It should also alleviate pressure on the balance sheet; as at 31st March 2020, it had an asset-liability ratio of 21.2 per cent. © Zephus Ltd