WineDepot has acquired 100 per cent ownership of Kaddy for $34.25m effectively forming Australia’s largest alcohol-focused cloud-based logistics and marketplace platform.
Together, the combined operation will immediately account for over 1,900 buyers across the on and off-premise segments, along with over 1,000 suppliers of alcoholic beverages accounting for more than 10,000 products.
WineDepot is raising $12.75m from a placement to institutional investors, while $2 million of shares is from retail investors. The acquisition is split with $6.75m in cash and $27.5m in shares to be paid to Kaddy’s independent shareholders, its founders and its employees giving them at 13 per cent share in WineDepot. $5.3m from the capital raise will fund the expansion of Kaddy (and $700k were the costs of the capital raise).
WineDepot CEO Dean Taylor said that uniting with another leading innovator that strongly complements the business would substantially accelerate WineDepot’s growth trajectory and create an unrivalled offering for the $17 billion Australian wholesale liquor market.
“Our vision to bring about the digital transformation of the alcohol beverages market has always been predicated on our ability to create an integrated technology platform that the industry can use to connect, simplify, deliver and share the value released…
“This merger represents a quantum leap forward in delivering that vision and providing the ability to scale rapidly, both here in Australia and in overseas markets. We’re so excited to be joining forces with Mike, Rich and the rest of the Kaddy team. We have watched the Kaddy team grow over the last two and a half years and it’s become evident that they have built a market-leading B2B beverage marketplace that has been embraced by the industry,” Mr Taylor said.
Mike Abbott, Co-Founder of Kaddy, will join the board of Digital Wine Ventures and head the platforms division of the combined WineDepot/Kaddy business and Rich Coombes, Kaddy’s other Co-Founder, will join as head of Commercial. Dean Taylor, who founded WineDepot, continues as CEO of the combined entity.
Since their foundation (coincidentally, both in September 2019), both WineDepot and Kaddy have been developing technology solutions to tackle the growing fragmentation of the liquor industry. They have both grown to prominence in their respective markets.
WineDepot is now the industry’s leading integrated trading, logistics and payment management technology platform, operating mainly in the wine industry. At the same time, Kaddy is the leading B2B wholesale beverage marketplace operating primarily in the craft beer, spirits, cider and seltzer sectors.
“The depth, variety and diversity of our combined product range will be impressive, with a strong differentiating focus on craft, independent, boutique, and emerging brands not currently available through mainstream distribution.
“For suppliers, we’ll deliver access to an increased pool of qualified buyers, lower customer acquisition costs, seamless entry to new markets and simplification of back-office functions, including invoicing and guaranteed payments.
“The technology deployed by each company can be easily and quickly integrated to unlock synergies that benefit suppliers, retailers and distributors alike, a process that we anticipate will start releasing value within a few months,” Mr Taylor said.
Digital Wine Ventures will seek shareholder approval to change the holding company’s name at the upcoming annual general meeting to reflect the fact that its total addressable market now goes well beyond just wine.
“Our whole team is pumped to be joining forces with WineDepot. For our existing customers, it will allow them to immediately enjoy even greater value across a wider range of products on the same order, invoice and delivery, and that’s only the start of what promises to be a real revolution in the wholesale beverage industry,” Mr. Abbott said.
A number of strategic investors will also join the DW8 share register as part of the capital raise and acquisition including John Szangolies, founder of the Urban Purveyor Group and the founders of Four Pillars distillery.