Vinyl Group, an Australian music technology firm listed on the ASX, has agreed to acquire Serenade, a London-based start-up focusing on digital collectibles. This acquisition represents a significant development for Vinyl Group as it aims to expand its reach in the rapidly growing Web3 and NFT market sectors, including the United Kingdom and Europe.
The transaction is worth $1.6 million, under which Serenade will acquire 100% of the shares in the firm's UK subsidiary. This exciting development is envisioned to improve Vinyl Group's products, which superfans and collectors cherish. They rely on Serenade's NFC-enabled Smart Formats and partner with famous music labels and musicians globally.
The acquisition's initial payment was made entirely in shares, costing Vinyl Group $800,000. The remaining $1.5 million is dependent on future performance via shares. This depends on achieving a gross of $4 million within the next year and an EBIT of $500,000. The shares to be used in the transaction will be deposited in an escrow account for one year, subject to the terms of the transaction.
Since its launch in 2021, Serenade has made a name for itself by collaborating with over 200 global music artists, including high-profile names like Liam and Noel Gallagher, Muse, and Sum 41. Serenade's impressive network and digital presence benefit Vinyl Group by expanding its market standing as a leading vendor of music collectibles and generating additional revenues.
According to the terms of the acquisition, Serenade's founder and CEO, Max Shand, will work as an employee at Vinyl Group. His input will be crucial, especially when merging Serenade's operations with Vinyl.com, Vinyl Group's flagship. Shand will also be granted 5 million stock options, which he hopes will be exercised depending on performance goals.
The proposed merger between Serenade and Vinyl Group is expected to foster the evolution of digital music collectibles. Attention will be paid to increasing the number of product lines with such values as digital pressings and other formats focused on the international market. Moreover, cooperation between the two firms is expected to enhance growth and profitability, especially in a rapidly growing digital collectibles m