Synlait sets itself off on a high
Synlait Milk's successful first day as a public company is an indicator that more agricultural firms should look at listing on the sharemarket, NZX chief executive Tim Bennett says.
The Canterbury dairy company's initial public offer (IPO) was oversubscribed after a surprise buy-in from dairy giant FrieslandCampina. The Dutch company's interest added to the high demand for the product and pushed the share price well above its $2.20 offer price on debut.
Synlait's shares soared on initial trading and closed at $2.74, a 24.5 per cent increase on the offer price. The intraday high was $2.80.
Bennett said strong domestic and overseas demand existed for shares in the agricultural sector.
"People see it, and rightly so, as investing in the future growth of our economy."
Synlait Milk was the latest in a run of Kiwi companies to list on the NZX, including the Mad Butcher, Moa beer, SLI Systems and Mighty River Power, with Meridian Energy next on the list.
Synlait Milk had strong cornerstone investors including Chinese company Bright Dairy and FrieslandCampina, he said. It was clear multinational companies were interested in injecting capital into the New Zealand agricultural sector.
Synlait, which has its processing factory at Dunsandel, collects milk from about 155 farms in Canterbury and manufactures a range of value-added ingredient products, infant formula and nutritional products.
It raised gross proceeds of $114 million at $2.20 per share through the IPO. Chairman Graeme Milne said the $75m of new capital would be used to repay debt and access funding for growth.
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