Interested in hearing people's thoughts on this one, especially if you are a Pre-IPO holder in Nature One Dairy
Comparing to Nature One Dairy, this one is a lot cheaper valuation. I believe Nature one Pre-IPO holders are in at a $65 million valuation?
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Deal Summary
Offer Type: Secured Convertible Notes
Amount: A$500,000 - A$1 million
No. of Notes offered: 500,000 - 1 million
Issue price per Note: A$1.00
New Zealand Dairy Pty Ltd ACN 637 643 353 (New Zealand Dairy or Issuer) will use the proceeds from the issue of secured convertible notes (Notes) to fund the costs of production of at least 60 tonnes of product under two supply contracts with a combined value of approximately A$6 million.
Capital Structure
Existing shareholders A$5.6 m (approximately)
Series A noteholders A$1.065 million (convertible at a pre-money valuation of $5.6 million)
Capital raising (this raise) A$500,000 - A$1 million
Total equity interest A$7.165 - $7.665 million
Board
Chris Berryman Managing Director
Rajpreet Bagri Chief Operating Officer
Hamza Habib Chief Strategic Officer
Funds required
New Zealand Dairy Pty Ltd ACN 637 643 353 (New Zealand Dairy or Issuer) will use the proceeds from the issue of secured convertible notes (Notes) to fund the costs of production of at least 60 tonnes of product under two supply contracts with a combined value of approximately A$6 million.
Proposed Transaction
The issue of Notes by New Zealand Dairy is at a pre-money (including any convertible securities, performance shares and options) valuation of New Zealand Dairy of between A$8 million and A$10 million, dependent on the amount raised.
New Zealand Dairy previously raised A$1.065 million under a "Series A" funding round via the issue of convertible notes. As a condition precedent to the issue of the Notes, investors that subscribed for notes under the Series A funding round will be invited to convert their Series A notes into equity at a pre-money valuation of A$5.6 million or rollover into Series B notes.
Business Overview
NZDP has been producing infant milk formula since 1927. The "Karilac" brand (the brand used by the Issuer and NZDP to market their products) was the first infant formula to be produced in New Zealand (first produced in 1927) and sold internationally. Karilac Shegoa is a unique brand in the market which has created a nourishing combination of sheep & goat milk infant formula. The Shegoa combination results in high nutritional content and better digestibility when compared to standalone cow, goat or sheep infant formula. Shegoa is carefully blended with high quality sheep and goat milk creating a wholesome infant formula that is hypoallergenic, gentle on digestion and easy to absorb, naturally rich and creamy in taste and texture.
NZDP has the rights to own the brand, recipe and associated intellectual property required to produce, market and sell the infant milk formula known as "Shegoa". Among its suite of assets, NZDP owns a number of global trademarks associated with Shegoa and a patent pending.
Investment Highlights
At present, the sale, production and marketing of Shegoa is New Zealand Dairy's primary business activity. New Zealand Dairy has recently:
secured ranging with a leading supermarket chain in Australia and is currently in the process of setting up distribution for Victoria;
signed a 5 year distribution deal with an Australian distribution company, granting exclusive rights to distribute Shegoa formula into Indonesia and Malaysia. Sales are expected to commence in Q3, 2021; and
signed a letter of intent with Evakate Pty Ltd (Evakate) under which it agreed to appoint Evakate as the exclusive distributor, with the rights to sell, distribute and market Shegoa infant formula into 'FairPrice' stores in Singapore. This partnership and first order are conditional on: regulatory approval for the Shegoa formula range, full ranging into 180 FairPrice stores by June 2021, and an agreed sales and marketing plan to support brand development and sales in Singapore.
New Zealand Dairy is also currently in negotiations for distribution for the South East Asia market.
New Zealand Dairy plans to utilize an asset-light business model, focussing on core sales and marketing activities for future growth.
