The Thomson Resources Ltd (ASX: TMZ) share price is soaring 11% higher in early afternoon trade.

The All Ordinaries Index (ASX: XAO) remains in positive territory as well, up 0.3%.

Below, we take a look at the ASX resource explorer’s silver update that looks to be spurring investor interest.

What silver update was reported?

The Thomson Resources share price is leaping higher after the company reported on positive progress at its 100% owned Silver Spur Mine, located in Queensland.

AMC, the company’s resource consultants, have begun calculating an updated JORC 2012 Mineral Resource Estimate (MRE). Thomson’s geoscience consultants, Global Ore Discovery, have analysed historic geophysics and recent structural interpretations, highlighting “a series of compelling exploration targets in the mine area”.

According to the release, the updated MRE will include 11 drill holes with “significant” silver and zinc mineralisation. The 11 holes were drilled by previous miners and were not incorporated into the 2004 Silver Spur MRE, the most recent MRE for the project.

Commenting on the results, Thomson Resources’ executive chairman, David Williams said:

Our second mineral resource estimate – Silver Spur – is now on the way with AMC. At the same time the Mt Gunyan relog and drill data validation is advancing a pace. The work undertaken so far is showing Silver Spur to be an exciting area with tremendous upside potential and we have the feeling that this sleeper is going to offer up a lot.

The recent work by the Global Ore team as part of the Resource Estimate project has thrown up exciting exploration potential which has been confirmed down dip and adjacent to the Silver Spur mine. There is also a very interesting district scale picture emerging of the larger Texas Silver district exploration potential which shows there is a lot more to come in this area.

The company has contracted Planetary Geophysics to resurvey the geophysics in the area surrounding its Silver Spur mine prior to renewed drilling. That’s expected to start in December.

Thomson Resources share price snapshot

With today’s intraday gains factored in, the Thomson Resources share price is up 18% over the past 12 months. That’s right about in line with the 19% gains posted by the All Ords over that same time.

Over the past month, Thomson Resources shares are down 14%.

The post Here’s why the Thomson Resources (ASX:TMZ) share price is surging 11% appeared first on The Motley Fool Australia.

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• What’s up with the Wesfarmers (ASX:WES) share price today?
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• Experts love these 2 ASX shares punching above their weight
• Star Entertainment (ASX:SGR) share price lifts despite news execs may face public hearing
• Credit Suisse says the Kogan (ASX:KGN) share price has major upside

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is having another day in the green so far this Friday, building on yesterday’s gains. At the time of writing, the ASX 200 is up a 0.62% at 7,356 points. But let’s take a closer look at one of the ASX 200’s most beloved blue-chip shares, Wesfarmers Ltd (ASX: WES).

The Wesfarmers share price started the day off strong, initially rising as high as $54.79 a share soon after open. However, investor sentiment seems to have cooled somewhat since. Wesfarmers shares dropped into the red before climbing again, and are presently trading at $54.60 apiece, up 0.47% for the day so far.

So what’s happening for this company today?

The name’s Bond. Sustainability bond

We did get one piece of news out of the company this morning. Just before market open, Wesfarmers released an announcement outlining a new bond issuance. The company is aiming to raise 600 million Euros (or $938 million) from these new bonds.

But this is no ordinary money-raising exercise. Wesfarmers announced it will be issuing its first-ever Euro-denominated bond in the European capital markets. Interestingly, this bond will be a “sustainability-linked” one. Sustainability-linked bond?

Wesfarmers explained it in their announcement this morning:

The interest rates payable on both the Australian denominated and Euro denominated sustainability-linked bonds are linked to Wesfarmers’ progress against two sustainability performance targets. 

The performance targets relate to increasing the use of renewable electricity in the Group’s retail divisions and reducing the CO2e emissions intensity of ammonium nitrate production in the Wesfarmers Chemicals, Energy and Fertilisers division.

Wesfarmers said the proceeds raised from these Euro bonds will “be used for general corporate purposes”.

Unfortunately for Aussie bond investors though, these bonds won’t be available for Australian retail investors. Instead, they will be offered as a listed product on the Singapore Stock Exchange.

Wesfarmers share price snapshot

Wesfarmers shares seem to have had a run of bad luck lately. Since peaking at a new all-time high of $67.20 a share back in late August, the company is now down close to 20% from those highs.

The Wesfarmers share price is now up 5.7% in 2021 year to date. It is also up just over 13% over the past 12 months. That compares with 9.7% and 18% respectively for the ASX 200 index.

At the current Wesfarmers share price, this conglomerate has a market capitalisation of $61.51 billion. It also has a dividend yield of 3.27%.

The post What’s up with the Wesfarmers (ASX:WES) share price today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Limited (ASX: CSL) share price is edging higher today and is currently trading hands at $298.49.

CSL shares are crawling northwards amid reports the Federal Government will not be renewing its contract with the biotech company to manufacture more AstraZeneca Plc (LON: AZN) COVID-19 vaccine doses.

Here’s what we know.

Federal Government won’t renew contract past 50 million doses

In a press conference yesterday, Federal Health Minister Greg Hunt advised that the Federal Government would not be renewing its contract with CSL to manufacture more AstraZeneca vaccines past the 53.8 million doses currently stipulated.

The blend of total volumes is made up of a 50 million dose production run in Australia, and a 3.8 million supply from overseas.

According to CSL, it has already manufactured 20 million doses under the agreement, with the remainder expected for completion next year.

Whilst the government’s call may come as a surprise to some, minister Hunt explained it was “never contemplated that CSL would become a contract manufacturer”, alluding to a position in long-term vaccine manufacturing for the government.

“They have other important global vaccine roles, as well as Australian vaccine…roles to be playing” Hunt said. As such, the government will be searching for alternative sources to manufacture its COVID-19 vaccine supply – whether that be domestically or not.

Hence nothing fundamental has changed for CSL at all, only that the government was never seeking to establish a long-term manufacturing relationship with CSL on the COVID-19 front.

Perhaps this is why the market has been easy on CSL shares today despite the news, as the biotech will still realise the full cash amount stipulated under the deal.

In a brief statement on its website, CSL quoted remarks made by chair Brian McNamee AO at its AGM, saying that the company is “pleased to say that the Australian Government and AstraZeneca trusted us as their partners to help the country respond to the emerging crisis through the most effective solution available: vaccination”.

The rollout of AstraZeneca’s SARS-CoV-2 vaccine label, Vaxzervria, has lagged its Pfizer competitor – Comirnaty – in Australia significantly, despite CSL’s capacity to produce an additional 30 million doses.

For instance as of 10 October, of the roughly 30 million doses that had been administered in Australia, only around 41% of these were of the AstraZeneca label.

For reference, as of 14 October, 65.4% of the eligible population are double vaccinated against COVID-19 in Australia, with around 84% having at least one dose.

CSL share price snapshot

The CSL share price has had a difficult year to date, having posted a return of just 5.5% since January 1.

Despite this, it has slipped into the red by around 1% over the past 12 months.

These returns lag the S&P/ASX 200 index (ASX: XJO)’s return of around 19% in that time.

The post Own CSL (ASX:CSL) shares? Here’s why the government won’t be extending the biotech’s AstraZeneca vaccine contract appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Whether the market is up or down, there is one type of ASX stock that investors love — businesses that upgrade their expected results.

If a company finds that it’s doing better than previously thought, or it’s consistently hitting the higher end of its forecasts, it’s a pretty good sign for future returns.

There are 2 ASX shares in particular that have caught the attention of 2 experts, who rate them both as a “buy”.

One only listed on the ASX a few months ago, while the other is a veteran on the bourse:

You have used this ASX share’s product without knowing

Montgomery Investment Management chief investment officer Roger Montgomery rates telco MNF Group Ltd (ASX: MNF) as a buy after its latest bullish results.

“Management have finally committed to their Asian rollout,” he told a Livewire video.

“The megatrends in consumer technology that we’ve all experienced, they demand real-time telecommunication networks, and you’ve got to connect to that as part of the overall solution.”

According to Montgomery, if you’ve done everyday activities in Australia like video conferencing from home or looking for an Uber car, you’ve already used MNF’s software without knowing.

“It’s taken for granted. It isn’t easy,” he said.

“And they do this in Australia, but they’ve re-engineered their software ready to be exported and deployed in new markets. And that’s an opportunity that’s 20 times bigger than their current market. So for us, it’s a buy.”

Investor Mutual senior portfolio manager Simon Conn agreed.

“It’s not really understood by the consumer market, but they are one of Australia’s leading telcos because they facilitate the transfer of voice over the internet,” he said.

“As the copper network’s been deregistered or wound down, more and more voices are going through the internet.”

MNF shares had shot up 4.5% on Friday morning, to trade at $6.72. They’ve gained more than 52% this year.

Another ASX star in the making?

Australian Clinical Labs Ltd (ASX: ACL) debuted on the ASX in May after an initial public offer saw shares sold for $4 apiece.

While it traded below that mark for the first few weeks of its public life, it now has its head above water and Conn rates it as a “buy”.

“Australian Clinical Labs is the number 3 player in the pathology market in Australia. It’s in a very strong, defensive market — and this business generates good cash.”

According to Montgomery, some pundits reckon ACL is another Sonic Healthcare Limited (ASX: SHL) in the making.

“They’ve upgraded their first-half ’22 guidance twice in September. That was mostly attributed obviously to the continued strong demand for COVID testing,” he said.

“But unlike Sonic, where underlying testing is flat, ACL have reported recovery in the underlying or base business. Obviously, the Victoria and NSW outbreaks have been a big kicker with revenue guides upgraded by 10%. I think NPAT [net profit after tax] was upgraded by over 30%.”

Conn also thinks ACL has potential to grow through acquisitions.

“Whilst COVID volumes will decline, the cash on the balance sheet will position them well for further bolt-on acquisitions, which I think they can really then leverage their technology platform,” he said.

“So well led by Melinda McGrath, good board, and really well positioned, I think, in a strong industry.”

ACL shares were trading at $4.35 on Friday morning, up 3.7%.

The post Experts love these 2 ASX shares punching above their weight appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MNF Group Limited. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia has recommended Australian Clinical Labs Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Star Entertainment Group Ltd (ASX: SGR) share price is charging higher today, up 3.7% to $3.63 per share.

The wider market is having a good run too, with the S&P/ASX 200 Index (ASX: XJO) up 0.5% at time of writing. A second day of gains for the index.

Star Entertainment’s share price boost today comes despite news that its executives could still face a public hearing.

What’s all this about a public hearing?

The Star Entertainment share price has come under tremendous pressure over the past 9 days, tumbling a gut wrenching 30% from 6 October through to the end of trading this Tuesday, 12 October.

This, as my Foolish colleague Marc Sidarous noted earlier in the week, came “after a joint investigation by the Sydney Morning Herald, The Age, and 60 Minutes aired explosive allegations of money laundering, facilitating organised crime, fraud, and foreign interference at its casinos”.

Since the closing bell on Tuesday, the Star Entertainment share price has rebounded 13%, though shares remain down 21% from Tuesday’s close.

Today, investors appear to be shrugging of concerns of a potential public hearing on the legal matter, one that could pull in the company’s executives.

Chris Sidoti served as the chairman of the New South Wales Independent Liquor and Gaming Authority (ILGA) from 2008–2016.

As the Australian Financial Review reported this morning, Sidoti believes that Adam Bell, the investigator reviewing Star’s Sydney casino licence, could haul in the company’s top brass for a public hearing over the damning allegations.

According to Sidoti:

The terms of reference on the authority website do not lay down any process for the review and so my assumption is that Mr Adam Bell, SC, can conduct it in any way he wishes. If he wants to hold public hearings, then it seems to me that he is free to do so. That’s as it should be. It’s not a matter for the Premier or the minister or even the authority.

An ILGA spokesperson contacted by the AFR for comment wasn’t overly forthcoming, saying only, “If the Independent Liquor & Gaming Authority receives any recommendation from Mr Bell that any public hearings are required, it will give such a recommendation appropriate consideration.”

Star Entertainment share price snapshot

Having been hammered by the selloff earlier this week, the Star Entertainment share price remains down 3.5% year-to-date. By comparison the ASX 200 is up 10% so far in 2021.

Over the past month, Star’s shares are down 14%.

The post Star Entertainment (ASX:SGR) share price lifts despite news execs may face public hearing appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Kogan.com Ltd (ASX: KGN) share price is rising on Friday.

In early afternoon trade, the ecommerce company’s shares are up 1.5% to $10.91.

Though, this will be little consolation for some shareholders. The company’s shares are still down 44% in 2021.

Could the Kogan share price be in the buy zone?

One leading broker that appears to see a lot of value in the Kogan share price at the current level is Credit Suisse.

Its analysts currently have an outperform rating and $14.06 price target on the company’s shares.

Based on the current Kogan share price, this implies potential upside of 29% over the next 12 months.

Why is the broker positive on Kogan?

Credit Suisse is positive on the Kogan share price due to the company’s strong long term growth potential.

While the broker acknowledges that there is a lot of uncertainty in the near term, particularly given its elevated cost base which is squashing margins, its analysts feel Kogan’s future remains very positive.

This is due to its strong market position, the shift to online retail, and the strong value proposition of its private label offering.

When will we hear from Kogan next?

Given the uncertainty the company is facing, investors are no doubt keen for an update from Kogan.

The good news is that it won’t be long until Kogan comes to face to face with shareholders. While it has not yet announced the date, traditionally the company holds its annual general meeting in the middle of November.

While not obliged to do so, Kogan is likely to release an update on current trading when it holds this meeting, unless it releases a first quarter update in the meantime.

Those updates could have a major say in where the Kogan share price goes from here, so stay tuned for them.

The post Credit Suisse says the Kogan (ASX:KGN) share price has major upside appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Payright Ltd (ASX: PYR) share price is taking off today after the company released a trading update for the first quarter of financial year 2022.

Within the update, the company announced its fifth consecutive quarter of growth, as well as an improvement to its credit quality. As a result, the market is sending the company’s stock higher.

At the time of writing, the Payright share price is 39 cents, 13.62% higher than its previous close. It was as high as 45 cents — up 30% — in early trade before partially retreating.

Let’s take a closer look at the first quarter of FY22 for the merchant-focused buy now, pay later (BNPL) provider.

The quarter just been for Payright

The Payright share price is surging higher after the company reported its gross merchandise value for the September quarter was 72% more than that of the prior comparable period (pcp). Payright’s gross merchandise value reached $27.6 million for the 3 months just been.

Payright also saw its income from fees boom in the 3 months ended 30 September, coming to $3.8 million. That represents a 14% increase on that of the previous quarter and 45% more than the pcp.

Such strong performance came despite ongoing lockdowns in Australia and New Zealand.

The company also onboarded 5,800 new customers over the September quarter, bringing its total number of customers to 59,300. That’s 58% more customers than it had at the end of financial year 2021’s first quarter.

Finally, Payright’s overall credit quality improved notably over the 3-month period. As of 30 September, the company had arrears of just 3.18%, down 18 basis points on that of the prior quarter.

Commentary from management

Co-CEO Piers Redward commented on the results boosting the Payright share price today, saying:

Our robust internal underwriting measures and collections practices have helped us navigate the balance between maintaining and protecting the quality of the loan book and accommodating COVID impacted customer hardship.

Fellow co-CEO Myles Redward added:

We are consistently attracting new customers in key target verticals with higher transaction values and the recent launch of our app has further increased usability and accessibility of our product, contributing to the 58% increase in total customer numbers…

With many states and territories now emerging from lockdown, we expect to see an uptick across our key metrics leading into November, December, and January.

Payright share price snapshot

Despite today’s gain, the Payright share price is still deep in the red on the ASX.

It has fallen 59% since the start of 2021. It is also 61% lower than it was this time last year.

The post Payright (ASX:PYR) share price surges 13% on trading update appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Friday is off to a good start for ASX 200 bank shares, as the S&P/ASX 200 Index (ASX: XJO) rides on the coattails of a strong US market overnight. Additionally, this comes after Westpac Banking Corp (ASX: WBC) and Commonwealth Bank of Australia (ASX: CBA) introduced mandatory COVID-19 vaccines for all staff.

Out of the big four Aussie banks, the Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is faring the best on Friday. However, to the delight of investors, all of the big four are firmly in the green this morning.

Let’s take a closer look at the details of the recent vaccine development.

Banking on mandatory jabs

Much like many other industries in Australia and around the world, the banks have endured COVID-19 induced disruptions over the past 18 months. In fact, Westpac CEO Peter King mentioned the bank was forced to close and re-open more than 280 branches, in addition to 3,800 employees requiring isolation.

According to the release, the ASX 200 bank will expect all employees attending a Westpac workplace across New South Wales, Victoria, and the ACT to be fully vaccinated by 1 December 2021. From there, the bank will give employees in other states until 1 February 2022 to be fully vaccinated.

In its reasoning, Westpac cited the need to provide a safe work environment. Commenting on this, CEO Peter King stated:

Like other essential services, banking has remained open during the pandemic to support customers through COVID and with their banking needs. With a large workforce, it is important that we have the safest possible work environment.

Meanwhile, CBA has also commenced consultation with its staff over its own compulsory vaccine campaign. According to ABC News, Australia’s biggest bank plans to require all its employees to be fully vaccinated at some stage. However, an official policy has not yet been made public.

At this stage, CBA has set deadline dates to be fully vaccinated on a state-by-state basis. These include 26 November for Victoria; 1 December for NSW and ACT; 24 December for the Northern Territory; and February next year for the remaining states.

In total, the plan for mandatory vaccines across the two ASX 200 banks will affect approximately 76,000 employees.

What about other ASX 200 banks?

Currently, Australia’s banks are in two minds on making vaccines mandatory for staff. Joining Westpac and CBA, the Bank of Queensland Ltd (ASX: BOQ) also revealed on Thursday it will be ensuring its employees are vaccinated. According to the bank, more than 90% are already vaccinated or have plans to do so.

On the other hand, National Australia Bank Ltd. (ASX: NAB) and ANZ are taking a more passive approach. While both banks have not specified that the jab will be mandatory, they are following state-based health advice. For Victoria, that means employees must be vaccinated if entering the workplace.

This follows earlier decisions from other ASX 200 companies on the jab. For example, Qantas Airways Limited (ASX: QAN) opted for mandatory vaccinations for its more than 2 million staff in September.

The post These ASX 200 banks just made a decision that will affect 76,000 workers appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Webjet Limited (ASX: WEB) share price is up around 4% amid the latest changes to borders and quarantine that have been announced by the New South Wales government.

What has NSW announced about borders and quarantine?

The NSW government has announced that the hotel quarantine program is going to end on 1 November 2021 according to reporting by various media, such as The Guardian.

Premier Dom Perrottet said:

From November 1st, those people returning Australians and tourists who want to come back, who want to visit Australia and coming to Sydney, hotel quarantine will be a thing of the past.

We will require, working with the Commonwealth government, that people coming into here, you’ll need to do a PCR test before you board the flight stop, you will need to show proof of your double vaccination.

For double vaccinated people around the world, Sydney, New South Wales is open for business.

We want people back. We are leading the nation out of the pandemic. Hotel quarantine, home quarantine is a thing of the past. We are opening Sydney and NSW to the world.

There will be no home quarantine either for those double vaccinated people who want to come to Australia.

However, there were questions raised about some of the journalists regarding what the federal government has agreed to because it’s the federal officials that control the international border.

Investors be weighing up their thoughts on the Webjet share price with another border that opened:

Victoria and NSW border to open

On 20 October (or 19 October at almost midnight), fully vaccinated NSW residents will be able to travel to Victoria without quarantine.

But, those people must test negative before crossing the border, then isolate and test again negative again.

So whilst there’s still a bit of a process, there won’t be the 2-week quarantine rule that has been in place.

However, the unvaccinated people that want to travel from NSW to Victoria must still test negative before arriving and quarantine for two weeks.

People coming from ‘orange zones’ won’t need to get tested and isolate until they receive a negative result. But they need to hold a valid permit.

How could more travel affect the Webjet share price and profit?

Investors seem happy to send Webjet shares higher.

Webjet itself said a couple of months ago that its online travel agency (OTA) business was profitable in April to July, and Online Republic was profitable in April and May, but the lockdowns stopped that profitability. Management said they were confident that both businesses would return to profitability as soon as the domestic Australian and New Zealand markets reopen. International borders opening could also help things.

Relating to WedBeds, Webjet said this business was profitable in July and August and was on track to be profitable in September. It has seen strong demand as travel restrictions ease in North America and Europe, “suggesting significant upside as more international markets reopen.”

The business has been working on reducing its costs by at least 20% for when the company can get back to scale. The ASX travel share believes it will have a higher market share, lower costs and greater profitability.

The post Here’s why the Webjet (ASX:WEB) share price is lifting 4% on Friday appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Digital Wine Ventures Ltd (ASX: DW8) share price is sliding into the red today. Shares are currently changing hands at 6.25 cents apiece, a fall of 5.3%.

It comes after the company shed further light on its previously announced acquisition and capital raise.

Here are the details.

Digital Wine’s new acquisition and cap raise

Digital Wine announced today it had “accelerate(d) its penetration of the $17 billion Australian wholesale liquor market” via the acquisition of wholesale beverage marketplace Kaddy Australia Pty Ltd.

Kaddy is “Australia’s leading B2B (business-to-business) beverage marketplace enabling discovery, ordering and payments”, according to Digital Wine.

The venture capital specialist closed the transaction on a $6.75 million cash consideration and approximately 484.9 million of its own shares.

It believes the transaction is a “transformational opportunity to bring together two high-growth technology businesses to create the market-leading online marketplace” servicing the wholesale liquor market in Australia.

Digital Wine also ran through an extensive list of reasonings and justifications as to the key drivers of the acquisition.

Most of these are centred around synergies the two businesses lend each other. This will enable a mix of diversification and competitive advantages for each.

For instance, Kaddy does not have a logistics platform in situ and is reliant on third-party fulfilment by its suppliers.

Digital Wine’s WINEDEPOT asset solves this issue. It brings together its “tech-enabled logistics solution and Kaddy’s market-leading technology platform…to unlock significant value for its users and support the rapid scale of the merged businesses”.

In addition to the acquisition, Digital Wine is set to provide expansion capital to Kaddy. This will help the company grow its operations.

Digital Wine has therefore initiated a $14.75 million capital raising round to finance the expansion of Kaddy’s growth engine. It has received commitments of $12.75 million already via a share placement. All eligible shareholders are able to participate on the same terms.

What did management say?

Commenting on the news, Digital Wine CEO Dean Taylor said:

The combination of a world class B2B marketplace with a tech-enabled national logistics platform will create an unrivaled value proposition that’s relevant to every liquor licence holder in the country. Kaddy strongly complements our technology ecosystem and fast-tracks our ability to develop a stronghold in Australia’s $17 billion wholesale liquor market.

Digital Wine share price snapshot

The Digital Wine share price has gained 46% this year to date. It has climbed 5% during the past 12 months.

That’s well behind the S&P/ASX 200 index (ASX: XJO)’s gain of around 19% in that time.

The post Digital Wine (ASX:DW8) share price plunges on acquisition and cap raise appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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