As an analyst with over two decades of experience in the music and tech industries, I find this recent move by Vinyl Group to be a strategic masterstroke. The acquisition of Serenade, a leading eco-friendly NFT marketplace, positions Vinyl Group not only to expand into the UK and European markets but also to capitalize on the rapidly growing demand for digital music collectibles.
Australia’s publicly listed music credit company, Vinyl Group, has hopped onto the cryptocurrency trend by purchasing Serenade, a top-tier eco-conscious NFT marketplace specializing in bridging artists and fans worldwide.
On Monday, the company announced they had bought Serenade for $1.6 million, a move aimed at bolstering their global reach and providing enhanced experiences for dedicated fans and collectors.
Deal Structure and Financial Terms
The deal to obtain Serenade was structured as a stock-only transaction, which means that instead of paying with actual money, Vinyl Group paid using shares. This particular transaction allowed Vinyl Group to purchase 100% of Serenade’s UK subsidiary, giving them complete ownership over the platform and its resources.
As a crypto investor, I recently experienced a deal that was finalized over the weekend. In this transaction, the company paid me $800,000 worth of their shares immediately, which equates to approximately 8,214,274 shares. This calculation was based on their 15-day Volume Weighted Average Price (VWAP). These shares are now being held in escrow for a period of 12 months.
Furthermore, a performance-based bonus of up to 1.5 million shares is available. This bonus is dependent on the joint business of Vinyl.com and Serenade hitting $4 million in sales and $500,000 in earnings before interest, taxes, and depreciation within one year after the acquisition.
As stated in the announcement, if these performance goals are achieved, additional shares will be distributed at a price equivalent to the average trading price over the past 15 days after the earn-out phase has ended.
A Strategic Fit for Market Expansion
Obtaining Serenade plays a crucial role in Vinyl Group’s plan to broaden their reach beyond Australia, into the UK and European markets where Serenade has already made a substantial impact. Serenade, an eco-friendly NFT marketplace, is constructed on the Polygon blockchain, recognized for its minimal carbon footprint, with a primary focus on fostering connections between artists and fans through digital memorabilia.
It’s possible you’ve observed that we’ve been making a string of strategic purchases over the past few months. This includes Mediaweek Australia, a prominent media and marketing publication, as well as Funkified Entertainment, which specializes in events and brand activations. Today, we added another to our list: Serenade, a Web3 platform.
These…
— Vinyl Group (@vnlasx) September 30, 2024
Starting from its debut in 2021, this crypto company has shown robust expansion, as sales of its distinctive NFC-enabled Smart Format collectibles have consistently increased by approximately 56% each month since January 2024. In the first half of the year alone, they managed to sell more than 12,000 items. Additionally, their strategic partnerships with prominent labels will bolster Vinyl Group’s influence within the NFT marketplace.
The business has teamed up with over 200 international musicians, notable ones like Liam and Noel Gallagher, Muse, and Sum 41 among them. Furthermore, it has forged ties with more than 100 record labels, including heavyweights such as Warner Music Group, Beggars Group, and Concord.
Through this extensive system, the Vinyl Group gains immediate access to an expanding audience passionate about digital music souvenirs, thereby enriching and broadening the variety of goods available on Vinyl.com.
Serenade CEO to Join Vinyl Group
Vinyl Group anticipates that the purchase won’t leave the company financially worse off, which is referred to as breaking even on a pretend balance sheet. The income generated by Serenade will boost the combined monthly revenue of Vinyl.com to approximately $2 million, thereby enhancing its position in the music collectibles market and reinforcing its presence there.
In this arrangement, Max Shand, the pioneer and head honcho at Serenade, will become a part of Vinyl Group’s team, serving a pivotal function in seamlessly merging Serenade with the Vinyl.com website.
According to the conditions of his job, Shand will be granted 5 million stock options that will become available in two installments. The initial installment will become accessible if the overall business achieves its revenue and EBIT goals of $4 million and $500,000 within a year.
Two years following his start date at work, the second portion of compensation becomes available, lasting for a period of seven years. The price at which he can exercise this compensation will be set at a future point in time.
Matrixport Acquires Swiss-based Crypto Finance Asset Management
In addition to Vinyl Group, Matrixport, a financial services company from Hong Kong, has also expressed interest in the European markets by acquiring Crypto Finance (Asset Management) AG, a Swiss-based firm licensed to manage crypto assets.
According to the agreement, CFAM is now known as Matrixport Asset Management AG (MAM), functioning as the European branch of the company. However, despite the name change, the company will carry on serving its current clients, offering them top-tier cryptocurrency investment services.
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2024-09-30 12:22