The company exports milk powder products and high-value ingredients to some of the world's leading dairy food manufacturers.
Chairman John Penno said the offer came after the official opening last month where Synlait revealed it was already close to its maximum processing capacity.
The new equity would fund a second dryer, similar in scale to the first, but capable of manufacturing a new range of higher specification products.
Synlait had milk contracts that would grow production to 300 million litres next year.
The second dryer would nearly double the size of the production plant and increase annual processing capacity to 550 million litres by 2011.
The board decided to raise $100 million to fund the expansion, he said.
"The purpose is to fund expansion driven by demand for our products and availability of milk in our region.
"We now have the security of our supply base, the track record of the first plant and customer demand for these new products to push ahead with these plans."
The site was also designed with the flexibility to add a second dryer at marginal cost although the company anticipated that demand for those higher specification products would be some years away, Mr Penno said.
Capital raising would enable the company to continue to grow and reduce debt while it managed the risks of growth in the current environment.
Details of the fundraising would be available soon from First NZ Capital, he said.
Fonterra last month announced an oversubscription of its bond issues taking the original offer from $300 million to $800 million.
The bonds pay a minimum coupon of 7.75%.
