Martek will sell stock to pay for Ky. expansion

Demand called strong for infant formula additive

April 03, 2003|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

Martek Biosciences Corp. said yesterday that it will sell 2.8 million shares of stock in a secondary offering to help pay for an expansion of its manufacturing facility in Kentucky.

The Columbia-based company said it plans to start the sale Monday and complete it the week of April 14.

The sale is expected to bring in about $70 million for the expansion, which it is undergoing to keep up with demand for its infant formula supplement. The supplement gained U.S. approval last year.

"We looked at ... all of our potential financial sources and we think it makes the most sense to do this with common stock," said Peter L. Buzy, Martek's chief financial officer.

"The demand for our products has been incredible this past year," Buzy said. "We doubled revenue over the last two years and we hope to be able to do that again."

The company reported $46.1 million in revenue for the fiscal year that ended Oct. 31. Martek will have 27 million shares outstanding after the sale, he said.

The infant supplement is a blend of two nutrients, known as DHA and ARA, that are found in human milk. Both are fatty acids found in the brain and, in DHA's case, the retina. Studies have shown that the supplement may help babies' mental development and vision.

About a half-dozen U.S.-sold infant formulas include the Martek supplement, company officials said. Abbott Laboratories and Mead Johnson were the first to announce early last year that they would launch such products. Wal-Mart Stores Inc. recently introduced a formula, Parent's Choice, that is enriched with it.

Buzy said the company chose to expand in Winchester, Ky., rather than Maryland because most of its manufacturing workers are there.

Martek has spent $25 million to double the capacity of its Winchester plant and build a separate packaging and administrative building.

It hopes to begin the Kentucky expansion this year and have the facility up and running next year or in 2005.

Martek made the announcement after the markets closed yesterday. Its shares gained 76 cents to close at $29.52 on the Nasdaq stock market.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.