Vinyl Group's Ambitious Acquisition Strategy Aims for Revenue Doubling by FY25

Overview of the Acquisition Strategy

Vinyl Group Ltd, a leader in the music and media sectors, has unveiled its ambitious acquisition strategy for the first half of FY25. The company aims to leverage recent growth and success to acquire three complementary businesses: Mediaweek, Funkified, and Serenade. These acquisitions are expected to double the company's revenue run rate from $10.5 million to over $20 million by the end of the current financial year.

The company recently closed a fully underwritten $5.4 million ANREO, which will be used to accelerate user acquisition efforts on its Vinyl and Vampr platforms, reduce technology costs of the Jaxsta platform, and continue growing its media business. With this growth, Vinyl Group does not anticipate the need for further working capital for its existing business lines in the near term.

Details of the Acquisitions

Vinyl Group has identified and evaluated three businesses for acquisition. The first, Mediaweek, is a well-known media trade publication in Australia. The second, Funkified, is an events and brand activations business. The third, Serenade, is a web3 music technology platform specializing in digital collectibles.

The acquisition of Mediaweek was completed earlier this month, while the acquisition of Serenade was finalized on 30 September 2024. Funkified is expected to be integrated into Vinyl Group's operations shortly. These acquisitions will be funded through the company's cash reserves and the exercise of large option positions due to expire by the end of FY25.

Financial Impact and Synergies

The combined cost of these acquisitions is $2.3 million. Vinyl Group expects these acquisitions to contribute significantly to its revenue and profitability. The company anticipates a positive cashflow impact of approximately $1 million from these acquisitions.

Operational synergies are expected across the acquisitions, including cost reductions, margin enhancements, and expanded client bases. For example, integrating Mediaweek's team into The Brag Media is expected to result in substantial savings through shared sales resources and streamlined operations. Additionally, Serenade's technology will fuel new product lines across all of Vinyl Group's brands, positioning the company as a leader in the digital and physical music consumer space.

Corporate Goals and Future Outlook

Vinyl Group's corporate goals include adding web3/blockchain capabilities, accelerating digital/physical collectible offerings through Vinyl.com, unlocking trade publication opportunities, bringing events in-house, improving margins, and diversifying revenues faster. The company aims to connect 1,000 leading brands, 100 million music creators, and 1 billion fans by 2030.

Overall, Vinyl Group's acquisition strategy is expected to deliver strong returns through operational efficiencies, expanded market reach, and the introduction of high-margin products and services across its portfolio. The company remains committed to its purpose of building tech solutions that connect music fans, creators, and brands.