Baby food maker Bubs Australia is targeting further growth in China after buying a goat's milk powder producer for $39.
Bubs on Friday said it had bought NuLac Foods, which is best known for the CapriLac powder and yoghurt sold at Coles, Woolworths and IGA supermarkets.
The deal will also give Bubs exclusive access to 6.2 million litres of goats milk a year from farms in Australia and New Zealand.
Chief executive Nicholas Simms said this will help Bubs, which sells its own brand of goat milk infant formula, expand further into Asia.
"Clearly, securing access to such an important key ingredient will increase market confidence and mitigate regulatory risk," Mr Simms said.
"The combined strength of the organisations will deliver a highly compelling proposition and accelerate our collective growth in our domestic markets, and in China and south east Asia."
Some claim the structure of the proteins and fats in goats milk also make it easier to digest than cows' milk, especially for those not used to dairy products.
Mr Simms said the deal gives Bubs the ability to expand its product range and to build on consumers' understanding of the benefits of goats milk.
The deal includes NuLac's sales and marketing, intellectual property and brands, an almost 50 per cent share in its processing facilities, and an option to buy the Australian farm operating company and associated goat farms.
Shares in Bubs rose as much as 15 per cent on Friday after coming out of a two-day trading halt imposed for a $15 million institutional share placement.
They were still five per cent higher at 83.5 cents shortly at 1530 AEDT.
