Magnolia raises $7m as tech wave grows

20/07/2015 - 15:45

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The market appetite for backdoor listings of tech stocks continues unabated, with Magnolia Resources securing $7 million in funding commitments and Potash Minerals becoming the fifth exploration company from Western Australia to head down the tech path this month.

Magnolia raises $7m as tech wave grows
Takor Group founder Amir Farhand (middle) with his team which developed the Kojai app.

The market appetite for backdoor listings of tech stocks continues unabated, with Magnolia Resources securing $7 million in funding commitments and Potash Minerals becoming the fifth exploration company from Western Australia to head down the tech path this month.

Magnolia announced today its shareholders had given approval for the planned acquisition of Canadian company PDT Technologies, which trades as Whole New Home.

It also enjoyed strong demand for participation in its capital raising, with the maximum $7 million in funds committed.

The raising was jointly managed by Alto Capital and CPS Capital Group.

Magnolia is one of several WA companies undertaking capital raisings to support the reverse takeover of tech businesses.

  • East Africa Resources is raising $4.5 million through Argonaut to support its acquisition of Perth business Threat Protect Australia.
  • Latitude Consolidated, to be renamed Yatango, is raising $6 million through Azure Capital and Foster Stockbroking.
  • Bone Medical is planning to raise $3 million through GMP Securities for its acquisition of Perth-based geospatial technology company Takor.
  • Perth-based Erin Resources has bolstered its cash balance to the tune of $2.7 million, after Merchant Corporate Finance underwrote the exercise of share options. This funding will facilitate the potential acquisition of medical cannabis company MGC Pharmaceuticals.

These capital raisings follow the relisting on the ASX this month of four tech businesses after reverse takeovers – Tech Mpire, Direct Money, Cirrus Networks and ResApp Health.

The completion of these deals, and continued funding challenges for mining exploration, has encouraged more WA stocks to join the backdoor listing wave.

Minrex Resources, Aleator, BMG Resources, Leopard Resources and Potash Minerals have all announced this month their intention to acquire a tech business.

Potash has entered an agreement to acquire Seattle-based Buddy Platform Inc, which describes itself as one of the world’s first data aggregation and management platforms to focus on the ‘internet of things’ and connected device data.

Sixty-eight WA-related companies have announced backdoor listing deals during the past two years, according to data compiled by Business News for the BNiQ database.

Thirty of these deals have been completed, 10 have been scrapped, and the rest are under way.

Capital Mining today joined the 'scrapped deals' list, after pulling out of its planned move into medical cannabis and hemp-based food and cosmetics.

It has terminated the purchase of Broken Coast Cannabis and Cannan Growers, and is negotiating with Nutrawerx Inc over the termination of their agreemnt.

Director James Ellingford said Capital said it will continue its core business of being an exploration company.

 

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