The Digital Wine Ventures Ltd (ASX: DW8) share price has dumped more than 14% after emerging from a trading halt.
Shares in the company were placed in a halt late last week, having last traded at 9.1 cents. After being reinstated to the market, shares in Digital Wines dumped more than 14%, hitting an intra-day low of 7.7 cents.
At the time of writing, the Digital Wines share price has recovered slightly trading at 8.3 cents.
Investors were triggered after the company announced a strategic acquisition earlier today.
Shares in Digital Wines tank on strategic acquisition
Digital Wines announced to the market that the company intended to undertake a strategic acquisition of Parton Wine Group.
Parton Wine was established 14 years ago with more than 23,000 square metres of warehousing around Australia. The company is one of Australia's largest specialist wine and beverage logistics with over 200 unique suppliers.
In an investor presentation, Digital Wine highlighted that the acquisition would bolster its WINEDEPOT business. According to Digital Wine, the acquisition will provide a lift in key performance metrics and support the company's growth strategy.
As part of the acquisition, Parton Founder Richard Raddon will join WINEDEPOT's senior executive team as General Manager of logistics.
Digital Wine CEO, Dean Taylor, commented on the acquisition;
"Along with an immediate lift in key metrics, the acquisition provides us with another 225 customers that can be leveraged to drive further growth across our platform. The scale of the merged operation, overlaid with our investment in state-of-the-art technology, will undoubtedly help position WINEDEPOT as the market leading supply chain solution, focused on supporting the eCommerce shift in the wine industry.".
Digital Wine was able to raise $7,500,000 via a share placement at 6.5 cents. The capital raising was constructed as a two-tranche placement, with the funds used to fund the acquisition of Parton and support the company's growth strategy.
More on Digital Wine
Digital Wine is an online beverage supplier that provides end-to-end supply chain solutions for wine producers, distributors, importers and retailers. The company's WINEDEPOT business operates as a cloud-based software-as-a-service. The WINEDEPOT technology platform removes inefficiencies in supply chains and empowers direct-to-market sales.
In addition to details on the acquisition, Digital Wine also provided an update on its WINEDEPOT business.
The company highlighted that WINEDEPOT has completed the 2nd stage of its rollout in Melbourne. In addition, WINEDEPOT Logistics shipped record 27,000 cases in June. Digital Wine also noted that WINEDEPOT signed up 25 new suppliers and expects WINEDEPOT DIRECT to go live in July.
