Vinyl enters binding agreement to acquire Val Morgan Digital for $10.5 million

Australian music technology company Vinyl Group has entered into a binding asset sale agreement to acquire Val Morgan Digital for $ 10.5 million.

The full purchase amount comprises $ 7 million in cash and $ 3.5 million in VNL shares.

Val Morgan is a subsidiary of The Hoyts Group. The digital business’ assets include partnerships and ANZ licenses with BuzzFeed Inc., Fandom, Ladbible Group and Vox Media. These are expected to be novated prior to the deal being completed.

The transaction is expected to be completed in one month, following the conditions being satisfied.

Strength and scale

Val Morgan Digital was formerly a director competitor to Vinyl Group’s publishing arm, Vinyl Media.

The new entity will have a significantly larger portfolio of cultural assets and national audience reach. Following the acquisition, Vinyl Media’s combined audience reach is expected to reach approximately 47% of Australians online in the entertainment category and 51% in the news category. The Vinyl Group says this positions the new entity at comparable digital audience scale to major Australian media organisations including Nine and News Corp Australia.¹

This enhanced scale enables new opportunities for adaptive media campaigns, which involves embedding advertising in cultural assets. This allows advertisers to have meaningful brand connection through a mix of distribution channels to deliver a higher ROI on advertising spend.

Vinyl Group CEO & executive director Josh Simons says: “The acquisition of Val Morgan Digital materially enhances Vinyl Group’s scale, and consolidates our position as one of the largest and fastest growing media conglomerates in Australia. I am excited to oversee our strategy as we usher in a new era of Adaptive Media at scale in Australia. This will enable advertisers meaningful brand connections in an integrated and immersive ecosystem, through a mix of our culture distribution channels.”

The transaction is also expected to result in an approximate 73% increase to Vinyl Media’s revenue.

Outdoor and cinema

Vinyl Group has entered into a cooperation and services agreement with the Val Morgan Digital to cover outdoor and cinema advertising cross-sell capabilities. The partnership is intended to enhance Vinyl Media’s integrated offering and create further value for advertisers through multi-channel campaign opportunities.

Damian Keogh joins Vinyl Group board

As part of the transaction, The Hoyts Group CEO & president Damian Keogh has agreed to join the Vinyl Group Board as a non-executive director, effective on the deal’s completion.

Keogh brings more than 25 years of senior media and commercial leadership experience and is expected to support the Group’s continued growth, strategic partnerships and execution, as well as the smooth transition and integration of the Val Morgan Digital assets into Vinyl Media.

Keogh says: “This transaction recognises the strength of consolidation, bringing the assets of Val Morgan Digital into Vinyl Group. We have a large portfolio of premium cultural assets together with significant national reach, providing a unique and compelling value proposition for advertisers. I am excited to be joining the Board, working with Josh and his passionate team to contribute to Vinyl Group’s next phase of growth.”

Vinyl Group will update the market on completion and in accordance with its continuous disclosure obligations.

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