Vinyl Group Expands Media Division with Concrete Playground Acquisition

About Vinyl Group Limited

Vinyl Group Limited (ASX: VNL) is a leading force in the global music ecosystem, providing innovative tech solutions that connect creators, fans, and brands. With a diverse portfolio, the company empowers music creators through platforms like Vinyl.com, offering over 50,000 titles for fans to support artists. Vampr, a social-professional networking platform, connects 1.4 million creators globally, enabling collaboration and monetisation. Jaxsta, the world’s largest database of official music credits, streamlines revenue for businesses. Serenade pioneers Web3 physical and digital collectibles for artists. Vinyl Group also owns Mediaweek, Australia’s premier media trade publication, and The Brag Media, the country’s leading youth content creator.

The Strategic Acquisition: Expanding Media Reach

Vinyl Group, Australia’s only ASX-listed music company, has made a significant move to expand its media and commercial reach by entering into a binding Heads of Agreement to acquire Concrete Playground Pty Ltd for a total consideration of $5 million. This acquisition is expected to accelerate Vinyl Group’s trajectory towards positive cash flow and diversify its portfolio of media assets. The move comes as part of the company’s broader strategy to increase its footprint across various sectors of the entertainment and media industries.

Founded in 2009, Concrete Playground has established itself as one of Australia and New Zealand’s leading digital city guides, curating events, experiences, and trends across major cities like Sydney, Melbourne, Brisbane, Auckland, and Wellington. With its vibrant and dynamic platform, Concrete Playground has built a loyal and engaged audience, making it an ideal addition to Vinyl Group’s media division.

The acquisition of Concrete Playground is not just a strategic move to expand Vinyl Group’s media operations; it complements and strengthens the company’s existing media assets, which include The Brag Media, Australia’s largest creator of youth-focused content, and Mediaweek, the country’s top media trade publication. By integrating Concrete Playground under its media division, Vinyl Group will benefit from a broader agency network, extending its commercial reach and diversifying its potential clientele. The two businesses complement each other, with Concrete Playground serving a distinct set of clients while sharing similar brand values and strategic goals.

Vinyl Group CEO, Josh Simons, highlighted the synergies between the two companies. This acquisition will help Vinyl Group enhance its media capabilities while also broadening its appeal in the digital and entertainment space.

Growth Opportunities and Operational Efficiencies

Concrete Playground’s inclusion in Vinyl Group’s portfolio is expected to unlock several growth opportunities, particularly in terms of content and commercialisation. The platform’s established presence in multiple key cities offers an immediate avenue for Vinyl Group to extend its reach and diversify its audience base.

As part of the integration, Vinyl Group anticipates the acquisition will deliver operational efficiencies across its media division. Concrete Playground’s business model, which revolves around event curation and localised content, can be integrated with Vinyl Group’s other media properties to drive synergies in content creation, distribution, and monetisation. With the power of Vinyl Group’s media assets, Concrete Playground is poised to expand its offerings, tap into new markets, and engage more consumers through innovative event and content strategies.

The expected pro-forma contribution from Concrete Playground in calendar year 2024 includes over $4 million in unaudited revenues and at least $1.5 million in EBITDA. This financial performance aligns with Vinyl Group’s focus on delivering growth through its expanding media and tech portfolio. The integration of Concrete Playground is forecast to bring immediate revenue opportunities while also providing an enhanced media platform for Vinyl Group to leverage in the future.

Financial Performance and Path to Profitability

Vinyl Group’s acquisition of Concrete Playground is a significant step towards achieving its financial goals, particularly its aim of reaching sustained profitability. The acquisition’s pro-forma EBITDA of $1.5 million for CY24 signals strong potential for growth and profitability in the short term. This comes as Vinyl Group continues to scale its business and execute its broader strategy of diversifying into multiple revenue-generating segments within the entertainment industry.

The acquisition will also accelerate Vinyl Group’s timeline to achieving positive cash flow by approximately six months. This is a critical development for the company, as it moves closer to becoming a profitable and sustainable entity in the media and entertainment space. By diversifying into media and tech solutions for the music industry and beyond, Vinyl Group is building a solid foundation for long-term success.

The cash consideration of $3.5 million, alongside $1.5 million in scrip, further solidifies the company’s commitment to growing its media assets. The equity issued as part of the acquisition will also align the interests of both companies, fostering collaboration and a shared vision for growth. Furthermore, Concrete Playground’s expected operational efficiencies will help optimize the combined entity’s bottom line and pave the way for long-term value creation for shareholders.