Vinyl Group, Australia's only publicly traded music credits company, has joined the crypto bandwagon by acquiring Serenade, a leading eco-friendly non-fungible token (NFT) marketplace dedicated to connecting artists with fans globally.

In an announcement on Monday, the company revealed that it purchased Serenade for $1.6 million to strengthen its presence in international markets while enhancing its offerings for superfans and collectors.

Deal Structure and Financial Terms

The acquisition of Serenade was structured as an all-scrip transaction, meaning Vinyl Group paid entirely in shares rather than cash. This deal involved the purchase of 100% of Serenade's UK subsidiary, granting Vinyl Group full ownership of the platform and its assets.

The deal, completed over the weekend, saw the company pay $800,000 in shares upfront, equivalent to 8,214,274, based on its 15-day Volume Weighted Average Price (VWAP).

These shares will be held in escrow for 12 months. Additionally, a performance-based earn-out is worth up to $1.5 million in shares.

This earn-out is contingent on the combined business of Vinyl.com and Serenade achieving $4 million in revenue and $500,000 in earnings before interest and taxes (EBIT) within 12 months of the acquisition.

According to the announcement, if these performance targets are met, the remaining shares will be issued and priced again at the 15-day VWAP following the earn-out period.

A Strategic Fit for Market Expansion

The acquisition of Serenade is a critical component of Vinyl Group's strategy to expand beyond Australia and into the UK and European markets, where Serenade has already established a significant presence.

Serenade's environmentally friendly NFT marketplace is built on the Polygon blockchain, which is known for its low carbon footprint. It focuses on helping artists and fans connect through digital collectibles.

Since its launch in 2021, the crypto firm has demonstrated solid growth, with sales of its unique NFC-enabled Smart Format collectibles experiencing month-on-month growth of 56% since the start of 2024.

The platform sold over 12,000 units in just the first half of the year, and its commercial relationships with leading labels will give Vinyl Group greater leverage in the NFT marketplace.

The company has also collaborated with over 200 global music artists, including high-profile names such as Liam and Noel Gallagher, Muse, and Sum 41.

Additionally, it has secured partnerships with more than 100 record labels, including major industry players like Warner Music Group, Beggars Group, and Concord.

This vast network provides Vinyl Group with a direct pipeline into a rapidly growing fanbase for digital music collectibles, further diversifying its offerings at Vinyl.com.

Serenade CEO to Join Vinyl Group

Vinyl Group expects the acquisition to break even on a pro forma basis, meaning the acquisition should have no negative financial impact on the company. Serenade's contributions will lead to a combined revenue run rate of $2 million for Vinyl.com, strengthening its foothold in the music collectibles market.

As part of the deal, Max Shand, the founder and CEO of Serenade, will join Vinyl Group as an employee, playing a critical role in driving the integration of Serenade into the Vinyl.com platform.

Under the terms of his employment, Shand will receive 5 million stock options, which will vest in two tranches. The first tranche will vest if the combined business meets the revenue and EBIT targets of $4 million and $500,000 within 12 months.

The second tranche will vest two years after his employment start date. These options have a seven-year term, and the exercise price will be determined at a later date.

Matrixport Acquires Swiss-based Crypto Finance Asset Management

Meanwhile, Vinyl Group is not the only company looking to explore the European markets through strategic acquisition.

Earlier today, Matrixport, a financial service firm registered in Hong Kong, announced that it has purchased Crypto Finance (Asset Management) AG (CFAM), a licensed crypto asset manager based in Switzerland.

Under the terms of the deal, CFAM has been rebranded to Matrixport Asset Management AG ("MAM"), serving as the company's European division.

Despite the renaming, the company will continue to serve its existing customers, providing institutional-grade crypto investment solutions.

"This acquisition is expected to bolster Vinyl Group's market presence in Europe significantly," said a company spokesperson.