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Australian Music Company Vinyl Group Enters Crypto Market with Serenade Acquisition
Vinyl Group, Australia’s only publicly traded music credits company, has joined the crypto bandwagon with the acquisition of Serenade, a leading eco-friendly non-fungible token (NFT) marketplace dedicated to connecting artists with fans globally.
In an announcement on Monday, the company revealed that it purchased Serenade for $1.6 million to enable it to establish a stronger presence in international markets while enhancing its offerings for superfans and collectors.
Deal Structure and Financial Terms
The acquisition of Serenade was structured as an all-scrip transaction, meaning Vinyl Group paid entirely in shares rather than cash. This deal involved the purchase of 100% of Serenade’s UK subsidiary, granting Vinyl Group full ownership of the platform and its assets.
The deal, which was completed over the weekend, saw the company pay $800,000 in shares upfront, equivalent to 8,214,274 shares, based on its 15-day Volume Weighted Average Price (VWAP). These shares will be held in escrow for 12 months.
Additionally, there is a performance-based earn-out worth up to $1.5 million in shares. This earn-out is contingent on the combined business of Vinyl.com and Serenade achieving $4 million in revenue and $500,000 in earnings before interest and taxes (EBIT) within 12 months of the acquisition.
According to the announcement, if these performance targets are met, the remaining shares will be issued, priced again at the 15-day VWAP following the earn-out period.
A Strategic Fit for Market Expansion
The acquisition of Serenade is a critical component of Vinyl Group’s strategy to expand beyond Australia and into the UK and European markets, where Serenade has already established a significant presence. Serenade’s environmentally friendly NFT marketplace is built on the Polygon blockchain, known for its low-carbon footprint, and focuses on helping artists and fans connect through digital collectibles.
You may have noticed that we’ve made a series of strategic acquisitions in recent months. Starting with leading media and marketing publication @MediaweekAUS, events and brand activations business Funkified Entertainment, and today with Web3 platform @joinSerenade.
These… pic.twitter.com/9Dqh6TyMqh
— Vinyl Group (@vnlasx) September 30, 2024
Since its launch in 2021, the crypto firm has demonstrated solid growth, with sales of its unique NFC-enabled Smart Format collectibles experiencing month-on-month growth of 56% since the start of 2024. In just the first half of the year, the platform sold over 12,000 units, and its commercial relationships with leading labels will provide Vinyl Group with greater leverage in the NFT marketplace.
The company has also collaborated with over 200 global music artists, including high-profile names such as Liam and Noel Gallagher, Muse, and Sum 41. Additionally, it has secured partnerships with more than 100 record labels, including major industry players like Warner Music Group, Beggars Group, and Concord.
This vast network provides Vinyl Group with a direct pipeline into a rapidly growing fanbase for digital music collectibles, further diversifying its offerings at Vinyl.com.
Serenade CEO to Join Vinyl Group
Vinyl Group expects the acquisition to break even on a pro forma basis, meaning the acquisition should have no negative financial impact on the company. Serenade’s revenue contributions will lead to a combined revenue run rate of $2 million for Vinyl.com, strengthening its foothold in the music collectibles market.
As part of the deal, Max Shand, the founder and CEO of Serenade, will join Vinyl Group as an employee, playing a critical role in driving the integration of Serenade into the Vinyl.com platform.
Under the terms of his employment, Shand will receive 5 million stock options, which will vest in two tranches. The first tranche will vest if the combined business meets the revenue and EBIT targets of $4 million and $500,000 within 12 months.
The second tranche will vest two years after his employment start date, with these options having a seven-year term, and the exercise price to be determined at a later date.
Matrixport Acquires Swiss-based Crypto Finance Asset Management
Meanwhile, Vinyl Group is not the only company looking to explore the European markets through strategic acquisition. Earlier today, Matrixport, a financial service firm registered in Hong Kong announced that it has purchased Crypto Finance (Asset Management) AG (CFAM), a licensed crypto asset manager based in Switzerland.
Under the terms of the deal, CFAM has been rebranded to Matrixport Asset Management AG (“MAM”), serving as the European division of the company. Despite the renaming, the company will continue to serve its existing customers, providing institutional-grade crypto investment solutions to them.
Australian Music Company Vinyl Group Enters Crypto Market with Serenade Acquisition
