China New Borun has been highlighted as Renaissance Capital's Featured IPO.
China New Borun is the country's third largest producer of corn-based edible alcohol, which is primarily used by distilleries as an ingredient in baijiu, a grain alcohol beverage that is the most popular liquor in China. After acquiring a competitor out of bankruptcy in 2008, the company has rapidly increased annual production capacity to over 260,000 tons. Because supply currently outstrips demand, the PRC has prohibited new facility construction and the multi-billion dollar market for China New Borun's products is expected to grow at a 17% CAGR through 2012.
The company plans to raise $71.5 million by offering 5.5 million shares at a proposed price range of $12-$14. Piper Jaffray is acting as bookrunner on the deal, which is expected to price this week and trade on the NASDAQ under the symbol "BORN."
Read our full IPO Commentary.
