(Reuters) - Shares of Bubs Australia jumped on Thursday after the company signed a deal to supply its infant formula products to U.S. retail giant Walmart (NYSE:WMT) amid a baby food shortage in the world's largest economy.
Walmart plans to buy a shipment of six Bubs Infant Formula and two Aussie Bubs Toddler Formula products, which would be delivered to about 800 Walmart stores across the United States, Bubs Australia said, adding that the new supply built on its existing online product sales on Walmart.com channel.
Shares of Bubs Australia rose as much as 10.6% to A$0.625 in morning trade, valuing the company at about A$383 million ($268.94 million).
"The addition of Walmart will increase our bricks and mortar exposure in the United States over the coming days and weeks to around 4,800 stores across 35 states," Chief Executive Officer Kristy Carr said.
The 4,800-store footprint includes the first Bubs Australia consignment bought by retailers Kroger (NYSE:KR) and Albertsons.
Bubs Australia recently signed a deal with the U.S. government to supply more than a million tins of infant formula to help the country address the baby food supply crisis.
The crisis was triggered when Abbott Laboratories (NYSE:ABT) recalled dozens of its brands in February after consumers complained of infants contracting bacterial infections.
($1 = 1.4241 Australian dollars)