Photo Credit: Marcus Reubenstein
Australian music company Vinyl Group is set to acquire events and brand activations company Funkified. Here’s the latest on this deal.
According to details tipped to Digital Music News, Vinyl Group will acquire Funkified Entertainment for $2.5 million AUD ($1.71 million US); $1.8 million AUD ($1.24 million US) cash, $200,000 shares, and $500,000 deferred performance shares. Funkified was founded in 2009 and has served as The Brag Media’s in-house events arm since 2021. It also serves as a brand activation agency for some of the largest advertising and creative houses in Australia.
Breaking the buyout down a bit, Vinyl Group will acquire 100% of the issued capital in Funkified Entertainment in exchange for the aforementioned $1.8 million AUD in cash and $200,000 in shares valued at the 15 day volume weighted average price of Vinyl Group shares on the ASX for the period immediately preceding the completion date. These shares will then be subject to a twelve month escrow from the date of issue.
The cash portion will be paid in two equal tranches of $650,000 AUD, the first at the completion date and the second no later than six months after completion. A further $500,000 AUD will be deposited into an escrow account as security for 12 months from the completion date.
A further $500,000 in Vinyl Group shares will be paid to the shareholders of Funkified, contingent on Funkified achieving a minimum earnings before interest and taxes target of $500,000 in the twelve months following the completion date. Upon completion, Funkified Founder & CEO Gus Stephenson will enter into a full-time employment agreement with Vinyl Group to lead Funkified to achieve its performance goals.
To incentivize performance, Stephenson will receive five million options upon commencing employment with Vinyl Group, vesting in four equal tranches following each subsequent anniversary of his employment and provided his ongoing employment during this term. These options will have a seven-year term and will have an exercise price to be agreed between the purchaser and Mr. Stephenson prior to issue of the options.
Funkified unaudited revenues for the 2024 financial year amounted to $4.03 million with an EBITDA of $430,000. Integrated under The Brag Media operation, Vinyl Group expects to realize immediate margin improvement as a result of this acquisition. Group operational efficiencies will include Funkified managing the Mediaweek events schedule.
Completion is dependent on certain completion deliverables including the buyer giving notice to the seller that due diligence has been completed, obtaining any necessary shareholder, ASX, and/or ASIC consents and approvals, and no material adverse changes occurring between now and completion. Completion is expected by no later than December 31, 2024.
“The acquisition of Funkified completes our acquisition strategy aimed at fully realizing the opportunities identified in The Brag Media business, while improving group company margins, revenue and driving growth,” says Vinyl Group CEO Josh Simons. “Additionally, it accelerates our path to profitability. We look forward to welcoming the Funkified team and working closely together on opportunities to grow.”
“Following several years of working closely with the incredible team at The Brag Media and Vinyl Group, creating some of the country’s largest and most innovative events and activations, it is an exciting step in our 15-year history to officially join Vinyl Group,” adds Funkified Founder & CEO Gus Stephenson. “We look forward to bringing our expertise and accelerating the growth and profitability of events and activations across the wider organization.”
Source : DigitalMusicNews