It’s a new name, new game energy, as music company Vinyl (ASX: VNL)—formerly Jaxsta—acquires entertainment giant The Brag Media, the Australian publisher of Variety magazine and Rolling Stone AU/NZ. Vinyl will fully acquire the publisher, including its premium network of mastheads and events funded by a new investment by WiseTech Global (ASX: WTC) Founder and CEO Richard White, i.e. an $11 million placement and debt facility.
The Brag Media, Australia’s largest youth publisher, owns and publishes TheBrag.com, The Music Network, and Tone Deaf. It also exclusively represents local digital audiences for various titles, including Rolling Stone, Variety, HypeBeast, Billboard, and more. With a network reaching approximately ten million users monthly, it boasts over 40 million monthly page views.
White said, “I have watched closely as Josh has built Vinyl Group’s revenue and made substantial business gains since taking my initial investment. I’ve also noted that Luke and his dedicated team at The Brag Media have rapidly grown Brag into one of Australia’s most influential media and creative businesses. There’s no doubt that iconic brands like Rolling Stone and Variety make sense and add value to VNL.”
Vinyl will acquire 100% ownership of The Brag Media and its subsidiaries (Brag Group) for a total cash consideration of $8 million. Additionally, the Company retains the option to pay an additional $2 million in either cash or stock at its discretion.
The deferred compensation, if paid in cash, will accumulate 6% annual interest and is contingent upon The Brag Group achieving specific revenue and EBIT targets for CY24. It will start after reaching a minimum revenue of $12 million and a minimum EBITDA of $2 million, going up to a maximum of $15.5 million in revenue and EBITDA of $2.8 million.
Vinyl Group CEO, Josh Simons, said, “We can’t wait to start working with the iconic mastheads that Luke and The Brag Media have successfully developed in Australia. We’ve identified several impactful synergies between the two businesses that will deliver immediate cost efficiencies and revenue, including streamlining Vampr’s in-app ads business and leveraging The Brag Media’s impressive audience reach to bolster Jaxsta, Vinyl.com and Vampr in the market.”
As part of the agreement, The Brag Media CEO Luke Girgis has committed to a full-time role as Publisher and Managing Director for a minimum two-year term following the sale. This entails service to both The Brag Media and Vinyl Group businesses. Upon the completion of the sale, Girgis will be granted five million options, divided into two equal tranches.
The first tranche becomes vested upon achieving the 2024 revenue target of $12.0 million and an EBIT target of $2.8 million, along with a minimum of one year of post-sale employment. The second tranche becomes vested on the second anniversary of Girgis’ employment.
In FY23, The Brag Media reported revenues amounting to $8.39 million, including a net profit of $334,824. Notably, The Brag Media has experienced an average revenue growth of 125% over the past two financial years. In the past 12 months, the publisher has produced campaigns for brands including Adidas, Jim Beam, Tourism NT and more. It also produces The Variety Australia CMO Dinner, The Rolling Stone Australia Awards in Sydney and the Rolling Stone Aotearoa Awards in Auckland each year.
As of June 30, 2023, the indicative combined revenue for Vinyl Group would have been $9 million.
This year, Jaxsta gained its third CEO in two years, Josh Simons. Since then, it has witnessed a name change, won a Spotify licensor deal and now locked in The Brag Media. The FY24 results will reveal if the third time was, in fact, the charm for Vinyl.
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