Vinyl Group (ASX:VNL) Expands Portfolio with $5m Acquisition of Concrete Playground

December 12, 2024 03:17 PM AEDT | By Team Kalkine Media

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Vinyl Group (ASX:VNL) Expands Portfolio with $5m Acquisition of Concrete Playground — Image source: shutterstock

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Highlights

Vinyl Group (VNL) to acquire Concrete Playground for $5m.

Deal projected to enhance financial performance and accelerate cash flow timeline.

Concrete Playground’s integration to expand Vinyl Group’s portfolio and market reach.

Vinyl Group (ASX:VNL), Australia’s only ASX-listed music company, has entered into a binding Heads of Agreement to acquire Concrete Playground Pty Ltd for $5m. The deal includes $3.5m in cash and $1.5m in scrip, aiming to enhance Vinyl Group’s digital and media capabilities while accelerating its cash flow targets.

Concrete Playground, established in 2009, is a well-known digital city guide offering curated content on local events, experiences, and trends across Sydney, Melbourne, Brisbane, Auckland, and Wellington. This acquisition aligns with Vinyl Group’s strategy to diversify its operations and strengthen its commercial reach.

The acquisition is expected to contribute significantly to Vinyl Group’s financial performance. Concrete Playground is projected to deliver at least $1.5m in EBITDA and over $4m in unaudited revenue in 2024. These contributions are anticipated to bring Vinyl Group closer to achieving positive cash flow, accelerating its timeline by six months.

Vinyl Group’s portfolio includes a diverse range of businesses such as the music credit database Jaxsta, music collectibles platform Serenade, e-commerce platform Vinyl.com, and social-professional network Vampr. The company’s media arm encompasses The Brag Media and Mediaweek, further enhancing its ability to reach a broad audience.

Through this acquisition, Vinyl Group aims to broaden its client base, achieve operational efficiencies, and enhance its digital offerings. The integration of Concrete Playground’s city guide services is expected to complement the existing capabilities of Vinyl Group’s media and e-commerce divisions.

Under the agreement, Vinyl Group will acquire 100% of the issued capital of Concrete Playground. The $1.5m scrip component will consist of 12,676,413 ordinary shares issued at $0.11833 per share, subject to a 12-month escrow period. Additionally, $300,000 from the cash component will be held in escrow for 12 months post-completion to secure any potential claims under the Share Sale Agreement.

The deal’s completion is targeted by 28 February 2025. Following the acquisition, Concrete Playground’s Founder and CEO, Rich Fogarty, will exit the business, paving the way for Vinyl Group to integrate the city guide into its operations seamlessly.

This acquisition signifies a strategic move by Vinyl Group (VNL) to enhance its presence in the digital and media sectors, offering greater value to its stakeholders while diversifying its revenue streams.

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