The Objective Corporation Limited (ASX: OCL) share price wasted no time in 2021 proving that its performance last year wasn’t just a one-off aberration.

Since the start of trading in 2021, the Objective share price has risen by more than 12%. This occurred after the share price doubling in 2020, which put it into the list of top performers in the ASX SaaS shares sector.

Shares in this $1.2 billion software company have continued to outperform its peers in 2021. In comparison, the Altium Limited (ASX: ALU) share price is down by 12% on a year-to-date (YTD) basis, while the TechnologyOne Limited (ASX: TNE) share price has dropped 5% YTD.

So what’s been boosting the Objective share price?

Solid sales performance

During FY20, the company saw fast growth for its product, the Objective GOV365. This is a governance product for Microsoft Teams, which grew from 20 million to 75 million daily users in 2020.

As a result, for the 12 months ending 30 June 2020, the company reported revenue growth of 13% to $70 million – with 75% of this revenue classed as recurring.

The company followed up by issuing an upbeat guidance for FY21. At its annual general meeting (AGM) in November, Objective said it expected material growth in revenue and profitability in FY21. It did not, however, provide any figures.

The company also said it planned to do this by making efforts to target a broader customer base with cross-sell opportunities, as well as transitioning customers into subscription-based contracts.

The company also outlined its long term strategy of investing 20% or more of its revenue into research and development and expanding its global footprint by executing the right acquisition opportunities in 2021.

Why the strong demand for its products

The company’s products are tailored towards the use by government agencies. Recently, they benefitted from the COVID-19 pandemic, which forced governments to spend on governance-related software to control the transition into online work.

Objective also owns a suite of software that streamlines efficiencies across work activities. Its core offerings include the Objective ECM (Enterprise Content Management), Objective GOV365, Objective Perform, and Objective Trapeze.

All these products help government organisations to transition away from paper-based work into doing things digitally.

For example, Objective Trapeze helps surveyors approve digital plans, and Objective Connect helps government officials to share files securely across other departments.

At the time of writing, the Objective share price is down by 1.76% to $12.87.

More reading

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• ASX 200 up 0.4%: Altium disappoints, ARB impresses, Mesoblast charges higher
• Why Altium, Clover, PolyNovo, & Tyro shares are dropping lower
• Altium (ASX:ALU) share price slips following trading update
• 3 fantastic ASX shares to buy today

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Objective Limited. 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 Pure Foods Tasmania Ltd (ASX: PFT) share price is up 2.08% at the time of writing, trading at 98 cents. 

While the Pure Foods share price has fallen over 11% during the past month, the company has rocketed up over 300% since its April 2020 initial public offering (IPO).

So what’s sending the share price higher today?

Expansion of Woodbridge Smokehouse distribution

Earlier this morning, Pure Foods announced that food manufacturer Monde Nissin Australia (MNA) will be adding the Pure Foods brand Woodbridge Smokehouse (WBSH) to its national portfolio of products. 

The strategic partnership will see WBSH products available to an additional 1,400 independent stores across Victoria, New South Wales, ACT and Western Australia. The four products that will be initially offered by MNA are cold smoked salmon and ocean trout in 100g and 200g packs.

Based on the distribution expansion, Pure Foods expects WBSH revenue to increase by at least 50% during the 2021 financial year compared to the 2020 financial year. Pure Foods further expects revenue to increase across the company as a whole by 15% during financial year 2021 compared to financial year 2020. 

Speaking about the deal with MNA and looking ahead to future plans, Pure Foods Managing Director Michael Cooper commented:

With this extended distribution network PFT now services all major retail and majority of the IGA/ Independent channels in Australia. Along with our e-commerce platform, we are providing all Australian consumers access to our brands. We look forward to continuing to grow in FY21 as we develop and acquire ‘Better for You’ food & beverage brands.

A growth strategy to acquire new business and advance organically

In the company’s latest investor presentation, Pure Foods cited the company’s intention ‘to acquire, grow and develop premium food businesses in Tasmania’. Achievements during the 2021 financial year included acquiring Daly Potato Co., launching the plant-based New Pastures product range as well as launching the company’s premium Homestead Pate into 850 Woolworths Group Ltd (ASX: WOW) stores nationally.  

Pure Foods has also shared an ambitious e-commerce strategy and expressed its interest to tap into the Singapore market. 

At the time of writing, the Pure Foods share price is sitting at 98 cents per share, giving the company a market capitalisation of $50.96 million.

More reading

• How to invest in ASX shares in a post-COVID world 
• 5 ways to lose your money forever
• 2020 ASX recap of the year we’ll never forget
• 2 high quality ASX shares to buy for your retirement portfolio
• ASX 200 Weekly Wrap: ASX hits new post-March high

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths 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 Calidus Resources Ltd (ASX: CAI) share price has slipped lower today. This comes after the company purchased Warrawoona profit royalty in a bid to free up cash flow for the life of the gold mine.

At the time of writing, the Calidus share price is 1.04% lower to 47.5 cents. In comparison, the S&P/ASX 200 Materials Index (ASX: XMJ) is following a similar fate, down 0.6% to 16,401 points.

What did Calidus announce?

Calidus told the market today it has bought a 1.25% profit royalty over two tenements located in the Warrawoona Gold Project.

The company paid $45,000 and issued 750,000 Calidus shares to the executors of the estate for life of mine royalty.

Calidus said there remained one other 1.25% profit royalty over the tenements. This is the only non-statutory royalty on granted mining leases at Warrawoona.

More on the Warrawoona Gold Project

Situated in the East Pilbara district of the Pilbara goldfield region of Western Australia, the project has been marred historically with disjointed ownership.

Now controlled by Calidus, the entire Warrawoona Greenstone Belt covers a total of 780sq km. The project itself is regarded as one of the highest margins and significant gold projects within Australia.

Callidus managing director Dave Reeves, welcomed the purchase decision, saying:

The purchase of this life of mine royalty not only generates additional cash flow for the company but reduces the amount of time required to administer the royalty, allowing more focus on the core aspects of production.

The parties associated with the royalty have a long association with Warrawoona and we welcome them as shareholders to Calidus.

Calidus share price snapshot

The Calidus share price has climbed higher since the beginning of last year, reflecting gains of more than 90%.

The company’s shares reached a multi-year low of 17 cents in March in the COVID-19 fallout. However, moving in small peaks and troughs, the Calidus share price gradually regained ground to hit a high of 73 cents in mid-October.

More reading

• ASX stock of the day: Acrux (ASX:ACR) shares soar 36% on FDA approval
• New twist in 5G Networks (ASX:5GN) takeover of ASX-listed Webcentral
• 3 highly rated ASX growth shares to buy now
• 2 quality ETFs to buy for the long term
• Can the Domino’s Pizza (ASX:DMP) share price go even higher?

Motley Fool contributor Aaron Teboneras 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 Acrux Limited (ASX: ACR) share price is soaring today, up 36.36% at the time of writing to 22 cents a share.

Acrux shares closed at 16 cents a share yesterday but opened at 28 cents a share this morning before soaring all the way up to a high of 32 cents soon after. Even though Acrux has somewhat cooled off since, these new heights represent a 52-week high for the company.

So who is Acrux? And why are Acrux shares so convincingly on the march today?

An introduction

Acrux is a pharmaceutical company that describes itself as “dedicated to developing and commercialising topical pharmaceuticals”. It was incorporated in 1998. Ever since, it has developed and commercialised a number of topically applied pharmaceutical products in the US and Europe.

Today, Acrux aims to develop a “range of topical and dermatological generic products for the US market”. The company has three products approved for sale in the US, as well as a portfolio of topical products in development.

However, the company has had something of a rough trot over the past few years. Acrux no longer markets its flagship product Axiron (a testosterone replacement therapy) in the US after it lost patent protection. It withdrew it from sale back in 2017 due to competition from generic versions of this drug. It is still marketed outside the US, however. That is possibly why Acrux shares are, to this day, down 69% from the share price highs we saw back in 2016.

Even so, today Acrux has 14 generic products in its pipeline and has three products that have been submitted to the US Food and Drug Administration (FDA) for review. It also has an Evamist estradiol product, used in the treatment of menopause, available in the US market.

Why is the Acrux share price going gangbusters today?

Today’s extraordinary performance in the Acrux share price can largely be attributed to a market release the company announced this morning just before open. In this release, Acrux informed investors that the FDA has approved a generic testosterone product. This product is based on Perrigo’s Testosterone Topical Solution, which has a concentration of 30mg/1.5mL.

This news comes less than a week after Acrux announced the commencement of a new share purchase plan for existing retail shareholders. This plan was announced on 8 January and will run until 29 January. Shareholders can subscribe for up to $30,000 in new Acrux shares for a price of 15.7 cents a share.

But turning back to the FDA approval, the company had reportedly submitted an application for this product back in August 2018 that is a “generic equivalent” to the Perrigo product. Acrux is now able to manufacture and market this drug. The company was keen to point out that the Perrigo’s product that Acrux’s generic product mimics generated sales that “exceeded US$25 million” in the 12 months to September 2020.

Acrux had already entered into an exclusive sales, marketing and distribution agreement with another company – Dash Pharmaceuticals. Dash will apparently be responsible for “the commercialisation of the product in the United States”. This will include the “coordination of commercial manufacturing and management of marketing and distribution”.

Acrux CEO and managing director Michael Kotsanis had this to say on this news:

FDA approval is a major milestone for Acrux and its generic strategy. It is a testament to the hard work and dedication of the product development and regulatory team. We are excited to partner with Dash Pharmaceuticals to bring this product to market in the current financial year.

At the time of writing, the Acrux share price is sitting at 22 cents per share, giving the company a market capitalisation of $34.81 million.

More reading

• New twist in 5G Networks (ASX:5GN) takeover of ASX-listed Webcentral
• 3 highly rated ASX growth shares to buy now
• 2 quality ETFs to buy for the long term
• Can the Domino’s Pizza (ASX:DMP) share price go even higher?
• Leading broker names the ASX resources shares to buy in 2021

Motley Fool contributor Sebastian Bowen 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 continuing saga involving the 5G Networks Ltd (ASX: 5GN) acquisition of Webcentral Group Ltd (ASX: WCG) took another twist today.

5G Networks advised that the Australian Takeovers Panel had received another application from Webcentral’s key shareholder, Keybridge Capital Limited (ASX: KBC).

This is the second application from Keybridge, claiming that 5G Networks used coercive tactics to pressure Webcentral’s shareholders into selling.

At the time of writing, the 5G Networks’ share price has dropped 6% to $1.32, while the Webcentral share price is down 19.17% to 48 cents. Meanwhile, shares in Keybridge have been suspended from trading on the ASX since 2019.

Here’s the background behind the takeover

In November 2020, 5G Networks completed its scrip-for-scrip takeover of Webcentral, after acquiring 57% of the listed shares. 5G Networks installed its own chief executive, Joe Damase, to the top job at the digital marketing company, leading Webcentral’s board members to quit en masse.

The takeover came after objections raised by Keybridge to the Takeovers Panel a month earlier in October 2020. Keybridge accused  5G Networks of breaching the Corporations Act by using “coercive shareholder pressure” on Webcentral’s shareholders.

Keybridge claimed that prior to the takeover bid, Webcentral and 5G Networks had knowingly agreed to pay a $1.9 million success fee to a financial adviser if a 50.1% interest was achieved.  However, Keybridge argued this had not been disclosed in Webcentral or 5G Network’s bidder statements.

In its submission, Keybridge asked the Takeovers Panel for Webcentral shareholders to be “provided with withdrawal rights under the 5GN bid, or the bid be withdrawn”.

The panel at the time decided not to pursue the claims, which opened the path for the formal takeover to take place in November.

Today’s release confirmed that Keybridge has made another submission to the panel, in an effort to overturn the earlier decision.

A better rival offer

Keybridge owns 6% of Webcentral, and preferred a rival bid that valued Webcentral at 18 cents a share. This compared to 5G Network’s effective valuation of 14 cents a share.

Keybridge Capital has been suspended from trading on the ASX since 2019, after the corporate regulator ASIC found wrongdoing by its chief executive Nicholas Bolton. Bolton is currently back as the company’s chief after serving out his corporate suspension. 

Webcentral itself is a shadow of its former self. The company boasted a market capital of $440 million only three years ago, and is now worth $93 million.

More reading

• ASX stock of the day: Acrux (ASX:ACR) shares soar 36% on FDA approval
• 3 highly rated ASX growth shares to buy now
• 2 quality ETFs to buy for the long term
• Can the Domino’s Pizza (ASX:DMP) share price go even higher?
• Leading broker names the ASX resources shares to buy in 2021

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends 5G NETWORK FPO. 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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I’m a big fan of growth shares and feel very fortunate to have such a large number to choose from on the Australian share market.

But having so much choice can make it hard to decide which ones to buy. To help you decide which ones to add to your portfolio, I have picked out three top growth shares that are highly rated. They are as follows:

Appen Ltd (ASX: APX)

The first highly rated growth share to look at is Appen. It is a leading developer of high-quality, human annotated datasets for machine learning and artificial intelligence (AI). Its team prepare or create the data for the machine learning models of large tech companies and government organisations.

Analysts at Citi have a buy rating and $32.60 price target on its shares. The broker believes the company is well-positioned to benefit from the increasing spending on artificial intelligence and sees opportunities for it to expand its addressable market.

Kogan.com Ltd (ASX: KGN)

This ecommerce company could be a good option for investors due to continued rise in online shopping. In addition to this, its expansion into potentially lucrative verticals, the growing popularity of Kogan Marketplace, and recent acquisitions should support its growth in the coming years.

And while its shares have surged higher over the last 12 months, analysts at Canaccord Genuity still see a lot of value in them. The broker has a buy rating and $25.00 price target on Kogan’s shares.

Pushpay Holdings Group Ltd (ASX: PPH)

Another highly rated growth share is Pushpay. It is leading donor management and community engagement platform provider with a focus on the faith sector. It has been a very strong performer in FY 2021 and has just upgraded its full year EBITDAF guidance to between US$56 million and US$60 million. This will be up 123% to 139% year on year.

This is still scratching at the surface of its addressable market in the United States, which gives it a long runway for growth over the 2020s.

Analysts at Goldman Sachs are bullish on its prospects. They have a conviction buy rating and $2.59 price target on its shares.

More reading

• 3 ASX shares to buy that fund managers love
• Why ARB, Mesoblast, Pushpay, & Super Retail shares are racing higher
• Why the Pushpay (ASX:PPH) share price could shoot higher today
• Got money to invest? Here are 3 ASX shares to buy
• 2 of the best ASX shares to buy this month

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 Appen Ltd, Kogan.com ltd, and PUSHPAY FPO NZX. The Motley Fool Australia has recommended Kogan.com ltd and PUSHPAY FPO NZX. 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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There are some exchange-traded funds (ETFs) that may be quality ideas for some investors to look into.

ETFs are often investments that give exposure to a diversified group of businesses, in a single trade. Many ETFs also have lower fees than a typical active fund manager.

With that in mind, here are two of the most popular ETFs on the ASX:

Vanguard Msci Index International Shares ETF (ASX: VGS)

This is investment is provided by Vanguard, one of the world’s leading ETF providers. It doesn’t try to make a profit – the owners of Vanguard are the investors themselves, so Vanguard shares the profit by lowering the management fees for investors when it can.

Vanguard Msci Index International Shares ETF has an annual management fee of just 0.18% per annum, which is among the lowest on the ASX. The ETF is more than $2.5 billion in size.

The purpose of the ETF is to provide exposure to many of the world’s largest companies listed in major developed countries. Vanguard says that it offers low-cost access to a broadly diversified portfolio of shares and allows investors to participate in the long-term growth potential of international economies outside of Australia.

It has over 1,500 businesses in its portfolio. Just over two thirds of the portfolio is invested in US shares, though plenty of other countries have a material weighting including Japan, the UK, France, Canada, Switzerland, Germany and so on.

In terms of the actual largest holdings of Vanguard Msci Index International Shares ETF, at the end of November 2020 they were: Apple, Microsoft, Amazon, Facebook, Alphabet, Tesla, Johnson & Johnson, JPMorgan Chase, Visa, Proctor & Gamble, NVIDIA, Nestle and Berkshire Hathaway.

Over the past five years this ETF has generated net returns of 10.6% per annum. Vanguard showed that its price/earnings ratio was 25.5x at the end of November 2020.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This ETF is focused on the largest 100 businesses that are listed on the NASDAQ, which is an American stock exchange.

Many of the largest American tech companies are listed on the NASDAQ. Indeed, its largest holdings include: Apple, Microsoft, Amazon, Tesla, Facebook, Alphabet and Nvidia. These are similar holding names like the Vanguard ETF, however Betashares Nasdaq 100 ETF gives much larger exposure to them in terms of the portfolio weighting. Those seven businesses are not far off making up half of the overall ETF.

However, there are plenty of other businesses that are recognisable in the ETF’s portfolio such as PayPal, Adobe, Netflix, Intel, Broadcom, Qualcomm and Texas Instruments.

The annual management fee of Betashares Nasdaq 100 ETF is higher than the Vanguard one, at 0.48% per annum.

However, the net returns have been much higher in recent years. Over the past year to 31 December 2020 Betashares Nasdaq 100 ETF made a net return of 34.8%. Over the past five years it generated a net return of 22% per annum.

Whilst a large portion of Betashares Nasdaq 100 ETF is dedicated to tech shares, there are some non-tech holdings such as PepsiCo, Costco, Starbucks, Monster Beverage and Moderna, which gives sector diversification.

More reading

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• 2 fantastic ETFs to buy in 2021

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BETANASDAQ ETF UNITS and Vanguard MSCI Index International Shares ETF. 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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Over the last 12 months, the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO).

During this time, the pizza chain operator’s shares have rallied a sizeable 49% higher.

Why has the Domino’s share price smashed the market?

Investors have been buying the company’s shares over the last 12 months due to its strong performance during the pandemic.

For example, during FY 2020, Domino’s delivered a 12.8% increase in network sales and a 21.4% jump in online sales.

This was driven by strong same store sales growth and a 6.5% to increase in its store network to 2,668 stores. This comprised 78 new stores in Europe, 75 new stores in Japan, and 10 new stores across Australia and New Zealand.

This ultimately led to the company reporting a 7.3% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $303.0 million. This was despite the company providing $14.1 million to support stores through the height of the pandemic.

Can the Domino’s share price go higher?

The good news is that the Domino’s share price has been tipped to go higher from here by one leading broker.

According to a note out of Bell Potter, its analysts have just reiterated their buy rating and $99.30 price target on its shares.

This price target represents potential upside of 20% over the next 12 months excluding dividends.

With group year-to-date (first 17 weeks) same store sales up 8.4% on the prior corresponding period, the broker feels the company is well-placed to deliver another strong result in FY 2021. It is forecasting a 20% year on year increase in net profit to $174.9 million.

And looking further ahead, Bell Potter notes that management has plans to double its store network organically over the next decade or so to 5,550 stores. It also believes the company could accelerate its growth inorganically through acquisitions.

More reading

• Leading broker names the ASX retail shares to buy in 2021
• How the Domino’s Pizza (ASX: DMP) share price rocketed over 60% last year
• 2 outstanding ASX shares to buy and hold
• How does fiscal stimulus impact ASX share prices?
• Buy these ASX blue chip shares in 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises 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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Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.

On this occasion, I’m going to look at the resources sector. Here are a couple of shares they rate highly:

Nickel Mines Ltd (ASX: NIC)

Nickel Mines is one of the broker’s top picks. This is based on its shares being cheap relative to its peers, its aggressive growth profile, and its pure nickel commodity exposure. Nickel is one of Bell Potter’s preferred base metals.

The broker has a buy rating and $1.60 price target on the company’s shares.

It commented: “During 2020 NIC’s NPI production lines operated at steady state production levels and all-in costs that beat our original forecasts and nameplate capacity, resulting in production attributable to NIC of ~34ktpa. The strong operational performance and rising nickel price enabled NIC to repay debt early and declare a maiden A2cps dividend (unfranked).”

The broker has also been pleased with its agreement with its partner, Shanghai Decent Investment, to acquire a 70% equity interest in the Angel Nickel Project in Indonesia.

“We view this as a positive development. The acquisition has been de-risked by the strong performance of NIC’s existing operations and screens as excellent value on a number of metrics. It should lift attributable production by +25ktpa (~74%), commissioning October 2022,” it concluded.

Regis Resources Limited (ASX: RRL)

This gold miner is another resources share that Bell Potter rates highly. It currently has a buy rating and $5.72 price target on the company’s shares.

It views Regis Resources as an attractive, reliable gold producer and notes that it has achieved consistent operating margins and is investing smartly.

Bell Potter commented: “RRL’s FY20 EBITDA margin of 52% is competitive with, or ahead of, key industry peers. RRL’s ongoing CAPEX is, in our view, an investment into attractive, capital efficient growth options that leverage off RRL’s existing infrastructure – an aspect of its operations that set it apart from many peers.”

The broker believes the market is overlooking the potential of its McPhillamys Project in NSW, which has made good progress through the permitting process and is well placed to advance to production.

It feels this should deliver material production growth in the future and could commence construction during 2021.

“In our view, the market attributes little value to this asset. RRL also remains one of the sector leaders for shareholder returns. Its FY20 dividend equates to a payout of $41m and a payout ratio of 43% of NPAT for a 2.9% fully franked yield (at dividend declaration),” it concluded.

More reading

• 5 top ASX mining shares for dividends and growth in 2021
• Can these 2 outperforming ASX gold miners shine on through 2021?
• Why the Regis Resources (ASX:RRL) share price is pushing higher

Motley Fool contributor James Mickleboro 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 ECS Botanics Holdings Ltd (ASX: ECS) share price is a top ASX performer today, up 16%. This follows news that the company plans to acquire Victoria-based medical cannabis cultivator, Murray Meds.

Located on the Murray River in North Western Victoria, Murray Meds operates a licenced medical cannabis cultivation and manufacturing facility. The company produces around 3,500kg of medicinal cannabis per year consisting of dried flower, oils and tinctures. Murray Meds has harvested and packed 350kg so far this year, even before the full picking season starts in April.

During morning trade, the ECS share price shot up to 5.4 cents. However, its shares have since retreated to 5.0 cents at the time of writing, up 16.28%.

What’s pushing the ECS share price higher?

ECS Botanics advised that it has signed a binding term sheet with Flowerday Holdings Pty Ltd. The acquisition will see ECS own 100% of the issued capital in Murray Meds, and 100% of the issued share capital in Flowerday Farms. In addition to the transaction, ECS will also purchase Flowerday Land Property.

Under the deal, ECS will pay $1 million for the rights to 100 million fully paid ordinary shares, deemed at an issue price of 5 cents per share. The company will pay a further $1.5 million within 12 months, pending completion of the Flowerday Land Property purchase.

ECS Botanics said the shares will be escrowed on a split basis for 12 (50%) and 24 (50%) months.

The company said once the acquisition is concluded, ECS will be one of largest vertically integrated medicinal cannabis businesses in Australia. The deal complements the company’s main operations based in Tasmania, as well as recent agreements such as its MediPharm Labs takeover.

What did management say?

ECS managing director Alex Keach welcomed the acquisition, saying:

As a combined group, we are positioning to become the largest and most geographically diversified cannabis producer in Australia. Murray Meds has harvested its maiden THC crop and currently has another crop growing.

This deal allows ECS to deliver earlier and more substantial revenue, while adding value to cannabis as communicated in our December announcement to purchase equipment for the extraction of cannabis resin. The deal sets us up nicely to become a globally recognised large scale, low-cost cultivator and manufacturer of medicinal cannabis.

Murray Meds founder and managing director Nan-Maree Schoerie, added:

The opportunities that this deal creates for Murray Meds, its customers and employees is tremendously exciting.

Both organisations are very grounded in their approach to delivering affordable medicinal cannabis as naturally and sustainably as we can, with shared values and an inherent drive to deliver for patients and shareholders.

More reading

• The Xero (ASX:XRO) share price is down 10% in 2021: Is this a buying opportunity?
• How I’d identify the best shares to buy now for the next decade
• Afterpay and Creso Pharma were among the most traded shares on the ASX last week
• What’s with the Legend Mining (ASX:LEG) share price today?
• Are the recent US elections turbocharging the ASX 200?

Motley Fool contributor Aaron Teboneras 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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