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Listed music industry play Vinyl Group (ASX: VNL) has secured a deal to acquire digital city guide Concrete Playground for $5 million, which the group says will accelerate its ambitions to be positive cashflow by six months.
Vinyl says Concrete Playground, a platform that curates events, experiences and trends in Sydney, Melbourne, Brisbane, Auckland and Wellington, will complement the company’s operations at The Brag Media, particularly its go-to-market strategy, by tapping into a similar agency network while serving its own distinct set of clients and briefs.
The acquisition is the latest in a series by Vinyl Group over the past year including UK Web3 pioneer Serenade, events business Funkified Entertainment, trade publication Media Week, and The Brag Media, the latter acquired this time last year for $10 million to bring leading music industry titles like Rolling Stone Australia and Billboard into the Vinyl collection.
Concrete Playground, which was launched in 2009 by founder Rich Fogarty, is expected to broaden Vinyl Group’s potential commercial reach and diversification.
Fogarty, the Concrete Playground CEO, will exit the company once the acquisition is settled to “pursue new opportunities”.
However, Fogarty is committed to working with Vinyl Group until the deal is completed “to ensure the staff and business are integrated smoothly”.
“We are looking forward to working with Rich and the Concrete Playground team to complete this acquisition in early 2025,” says Vinyl Group CEO Josh Simons.
“They’ve built a trusted platform that audiences genuinely love, and their approach to storytelling will be a natural fit with our broader media strategy.
“Operationally, this acquisition will be significant for Vinyl Group. It would not only elevate our capabilities but also fast-track our path to sustained profitability, allowing us to deliver even greater value to our shareholders and partners.”
Vinyl Group has signed a heads-of-agreement to acquire Concrete Playground with the deal comprising $3.5 million in cash and $1.5 million in Vinyl shares. The shares are expected to be issued at 11.833c each and will be subject to a 12-month escrow.
"I’m immensely proud of everything Concrete Playground has achieved over the past 15 years,” says Fogarty.
“This milestone reflects the talent, creativity and dedication of our team, along with the trust of our readers and partners.
“As the business transitions to new ownership under Vinyl Group, I’m confident their vision and resources will elevate Concrete Playground to new heights, inspiring even more people to discover the very best their cities have to offer."
Concrete Playground delivered unaudited revenue for more than $4 million over the past year, which Vinyl Group says would contribute a pro-forma EBITDA of about $1.5 million on settlement.
The business will be integrated into Vinyl Group’s media division, with the company expecting the business to deliver operational efficiencies that will “accelerate our timeline on achieving group-wide positive cash flow by six months”.
The acquisition is expected to be completed by 28 February 2025.
Vinyl Group, which counts Richard White - the billionaire founder of logistics software group WiseTech (ASX: WTC) - as a major shareholder, delivered revenue growth of 754 per cent to $4.971 million in FY24.
While the company posted a net loss of $17 million for the year, $11 million of this was non-cash expenses amid the company’s planned growth strategy transition.
Vinyl Group has previously announced that it is targeting positive cash flow in the first half of FY26 with an annual revenue run rate of more than $20 million.
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