Freedom Foods Group Ltd (ASX: FNP) announced its plans today to raise $200 million in equity.
The company is proposing to raise the equity via a $100 million entitlement offer to current shareholders and a $100 million institutional placement offer at a price of $4.80 per new share, which is a 6% discount to the volume weighted average share price of Freedom Foods over the last 30 days.
Freedom Foods aims to use the funds to increase its operational capacity and strengthen its balance sheet in anticipation of future acquisitions.
I think the company's healthy food focus makes it well positioned for growth in light of the long term trend towards healthy eating. This is one of those cases where traditional valuation metrics don't give the full picture as demonstrated by its PE ratio of over 100. This is a 'concept' stock that will need to maintain top line revenue growth to remain relevant.
