Biovittoria offer could be 'holy grail'

By JENNY KEOWN BusinessDay | Monday, 9 Nov 2009

Biovittoria is confident it will raise $20 million from its initial public offering and list on the NZX with a market value of just over $62m by the end of the year.

The company is commercialising PureLo, a natural, zero calorie sweetener made from the fruit luo han guo in China, and is initially targeting the United States market.

It launched the initial public offering (IPO) on November 5 offering shares of $1 each to retail investors, who had to buy a minimum $3000 worth. The offer closes on December 2.

Andrew McDouall of McDouall Stuart Securities, the lead manager for the IPO, said this was an opportunity for New Zealand investors to get in to an established company growing strongly in the world market, "rather than the other opportunities being presented to them which are just sell-downs from private equity firms trying to fix their balance sheets".

The company has spent more than six years in China developing the ingredient, establishing a network of growers and building a production facility.

Chief executive David Thorrold said the company would use the proceeds of the share placement to buy fruit, repay debt and fund capital projects.

PureLo needs to get regulatory approval from the US Food & Drug Administration.

It expected earnings before interest, tax, depreciation and amortisation of US$6.8m (NZ$9.2m) by March 2013, based on sales of US$35m.

Rebiana, a leaf-based natural sweetener extract, was the company's only significant competing product, Thorald said.

Meanwhile, the firm has recruited Pepsi Cola's former chief executive Chris Sinclair, and Allied Farmers director Gary Bluett to the board.

They will join once the company has listed. Coca-Cola's former chief technology officer Danny Strickland and American entrepreneur Kelly Flatley, founder of natural food company Bear Naked, will join the advisory board.

Former market development director of Cargill, Paul Paslaski, has been recruited as the company's US-based vice president of sales and marketing Paslaski developed the brand strategies for Truvia, a Rebiana-based sweetener.

There has been a lot of pressure on the US to reduce the amount of sugar in products, he said.

Many consumers remain concerned about the safety of artificial sweeteners leading food and beverage companies to seek natural alternatives.

Former Coca-Cola chief executive Neville Isdell has described zero-calorie natural sweeteners as the "holy grail".