Vinyl Group (ASX:VNL) has signed a binding Heads of Agreement to acquire Concrete Playground Pty Ltd, a digital city guide, for $5m in a deal comprising $3.5m in cash and $1.5m in scrip.
The acquisition is expected to deliver an immediate financial boost, with Concrete Playground projected to contribute at least $1.5m in EBITDA and more than $4m in unaudited revenue in calendar year 2024. Vinyl Group says the deal will accelerate its timeline to positive cash flow by six months.
Vinyl Group is Australia’s only ASX-listed music company. Its diverse portfolio includes the social-professional network Vampr, music credit database Jaxsta, music collectibles platform Serenade, and e-commerce arm Vinyl.com. Its media division includes The Brag Media and Mediaweek.
Concrete Playground, founded in 2009, provides city guides and curates local events, experiences and trends in Sydney, Melbourne, Brisbane, Auckland and Wellington.
By integrating Concrete Playground, Vinyl Group aims to broaden its client base, generate operational efficiencies and diversify its commercial reach.
Under the agreement, Vinyl Group will acquire 100% of the issued capital of Concrete Playground. The $1.5m in scrip will be issued as 12,676,413 ordinary shares at a price of $0.11833 per share. The shares will be subject to a 12-month escrow period. As part of the cash component, $300,000 will be placed in escrow as security for potential claims under the Share Sale Agreement for 12 months following the deal’s completion.
Finalisation of the deal is expected no later than 28 February 2025.
Upon completion, Concrete Playground’s Founder and CEO, Rich Fogarty, will exit the business.
Shares in Vinyl are trading 4.76% higher at 11 cents.