Bio-tech firm sees chance for fruitful float

BioVittoria's Chinese president Lan Fusheng with a crop of Luo Han. Photo / Supplied

Hamilton-based bio-technology company BioVittoria is hoping investors will see a sweet opportunity in its sharemarket float.

The six-year old business yesterday released details of a $20 million initial public offer which will list on the NZX on December 2.

The company produces a natural no-calorie alternative to sugar called PureLo from a fruit called Luo Han which is grown only in China.

It wants the money to buy more fruit, pay debt and expand its business into the United States where it is hoping to gain interest from big food and beverage companies.

The initial public offer closes on November 25. BioVittoria will have a market cap of $62 million after the float if the entire $20 million is raised.

Founded in 2003 by former HortResearch scientist Garth Smith and American businessman Stephen LeFebvre, the company has the backing of venture capital firm Endeavour Capital, the New Zealand Venture Investment Fund, ACC and Sir Stephen Tindall's K1W1 fund.

Chief executive David Thorrold said BioVittoria felt it was a good time to list: "People have been hunkering down but now there is some optimism I think people are looking for opportunities like this."

BioVittoria had raised US$7.5 million from Kiwi investors last year to set up a factory in Guilin and now it had its supply chain established the company was ready to take advantage of a trend for alternatives to sugar.

Thorrold said the business already had its sweetener in food produced by Pepsi, Kelloggs and Nestle and estimated the world sweetener market was worth US$50 billion ($68 billion).

It was hoping to gain FDA approval in the United States in February which would help open more doors into the food and beverage industry, he said.

ING equity investment analyst Craig Brown said the offer looked interesting but it was at the higher end of the risk spectrum for investors.

Brown said marketing would be required to convince consumers to switch to PureLo and it was not clear whether companies like Pepsi or Coke would pay for that. Brown said it was also difficult to know whether consumers would pay a premium price.

One market commentator said the listing could be too soon and because of the risks involved the company should still be raising money from private equity investors.