Vinyl Group Ltd (ASX:VNL, OTC:JAXAF) is set to expand its publishing arm after striking a binding deal to acquire the assets of Val Morgan Digital from HOYTS subsidiary Val Morgan and Co. for $10.5 million.
Val Morgan Digital sits within Val Morgan alongside Val Morgan Cinema and VMO, providing a suite of digital-led advertising solutions. Its portfolio includes well-known brands such as Fandom, POPSUGAR, BuzzFeed, Tasty, Vox Media and LADbible Group, collectively reaching millions of Australians each month.
The consideration comprises $7 million cash and $3.5 million in Vinyl shares priced at the 15-day VWAP, with the scrip component subject to a 24-month escrow. Completion is expected in about one month, subject to customary conditions, including the novation of key partnerships and ANZ licences with BuzzFeed Inc., Fandom, LADbible Group and Vox Media.
The acquisition materially lifts scale and accelerates VNL's strategy to build a diversified publishing business, with Val Morgan Digital having generated unaudited CY25 revenue of $10.7 million — an uplift Vinyl estimates would equate to an approximate 73% increase in Vinyl Media revenue on a pro forma basis.
Earnings uplift and scale benefits
Post-integration, the company is targeting a pro forma annualised EBITDA contribution of about $2.5 million, which it attributed to expected benefits from scale, operational leverage and integration into the existing Vinyl Media platform.
The transaction also includes a new commercial partnership with the seller covering cinema and out-of-home advertising cross-sell opportunities, aimed at broadening Vinyl Media’s integrated offering and multi-channel campaign options.
Audience reach and advertiser proposition
Beyond earnings, Vinyl is pitching the deal as a step-change in audience reach. Following completion, Vinyl Media’s combined audience is expected to reach around 47% of Australians online in the Entertainment category and 51% in the News category, putting it at a digital audience scale comparable with major domestic media groups such as Nine and News Corp Australia, based on Ipsos iris data.
Vinyl said the expanded footprint supports its “Adaptive Media” model, which embeds advertising in cultural assets across multiple distribution channels to deliver higher ROI for advertisers.
As part of the deal, HOYTS Group CEO and president Damian Keogh will join Vinyl’s board as a non-executive director on completion.
Vinyl intends to fund the cash component via a facility of up to $10 million from existing shareholders, alongside additional working capital.
You can see the full presentation here.