WineDepot has moved to strengthen its position in the digital spirits space with the complete acquisition of Kaddy. The two businesses will now merge to create Australia’s largest alcohol-focused cloud-based logistics and marketplace platform.
Both WineDepot and Kaddy have seen strong growth since their launch in 2019, and WineDepot CEO Dean Taylor said combining the two businesses will significantly accelerate WineDepot’s growth trajectory and create an unrivaled proposition for the $17 billion Australian wholesale liquor market. told.
“Our vision of enabling the digital transformation of the spirits market has always been based on our ability to create an integrated technology platform that the industry can use to connect, simplify, deliver and share the value released,” Taylor said.
“A platform that includes the next generation B2B marketplace powered by a logistics, order management and payment solution, enabling our supplier ecosystem to serve its own customers.
“This merger represents a quantum leap forward in providing the ability to realize this vision and scale rapidly, both in Australia and overseas markets. We are very excited to join forces with Mike, Rich and the rest of the Kaddy team.
“We’ve watched the Kaddy team grow over the last two and a half years, and it has become clear that they are creating a market-leading B2B beverage market that is embraced by the industry.”
Kaddy Co-Founder Mike Abbott will join Digital Wine Ventures’ board of directors and head the platforms division of the combined WineDepot/Kaddy business, and Kaddy’s fellow Co-Founder Rich Coombes will join as Head of Commercial. Dean Taylor, who founded WineDepot, continues as CEO of the combined entity.
Abbot said: “Our entire team is ready to join forces with WineDepot.
“It will enable our existing customers to instantly enjoy even greater value on a wider range of products with the same order, invoice and delivery, and this is just the beginning of what promises to be a true revolution in the wholesale beverage industry. ”
Together, the combined operation will instantly serve more than 1,900 buyers and more than 1,000 spirits suppliers, corresponding to more than 10,000 products, in the on-site and off-site segments.
Taylor said buyers will now enjoy greater choice, lower costs, improved convenience and a superior fulfillment experience.
“The depth, range and diversity of our combined product line will be impressive and there will be a strong differentiation focus to craft, independent, boutique and emerging brands that are not currently available through mainstream distribution,” he said.
“For suppliers, we will enable simplification of back office functions, including access to an increased pool of qualified buyers, lower customer acquisition costs, seamless entry into new markets and invoicing and guaranteed payments.
“The technology used by each company can be easily and quickly integrated to unlock synergies that benefit suppliers, retailers and distributors alike, this process we anticipate will start creating value within a few months.”
WineDepot’s parent company, ASX-listed Digital Wine Ventures (DW8), raised $12.75 million through a placement with institutional and sophisticated investors to fund the deal and raise expansion capital for Kaddy’s marketplace development.
The company also announced that it will invite over 10,000 existing retail investors to participate in the capital raise through the $2 million Share Purchase Plan on the same terms.
Subject to DW8 shareholder approval, Kaddy shareholders will receive a total of $6.75 million in cash and 484.9 million DW8 shares. Approximately $5.3 million of the funds raised will be used to accelerate the expansion of Kaddy’s B2B market. Currently, the combined entities’ annual pre-merger operating income ratio is estimated at approximately $21 million, and the marketplace business has an estimated annual Gross Market Value before the merger of $18 million.
A number of strategic investors will also join the DW8 stock registry as part of the capital increase and acquisition, including John Szangolies, founder of Urban Purveyor Group and co-founder of the Four Pillars distillery.