Vinyl Group secures Val Morgan Digital in $10.5 million deal
Vinyl Group (ASX: VNL) has announced the Vinyl Group Val Morgan Digital Acquisition, purchasing the publishing arm of Val Morgan Group for $10.5 million. The deal comprises $7 million in cash and $3.5 million in VNL shares, with the scrip consideration subject to a 24-month escrow period.
Val Morgan Digital’s portfolio includes Australia and New Zealand licences to premium lifestyle, gaming, food and entertainment platforms such as BuzzFeed, Fandom, POPSUGAR, Vox Media and LADbible. The business delivered $10.7 million in CY25 revenue and is expected to contribute approximately $2.5 million in annualised EBITDA post-integration.
HOYTS Group, the owner of Val Morgan, will retain outdoor and cinema advertising operations. A commercial cooperation agreement has been established with Vinyl Group to provide access to these assets. Vinyl Group is funding the transaction through a facility of up to $10 million provided by existing shareholders, covering the cash consideration and additional working capital.
| Deal Component | Value |
|---|---|
| Cash consideration | $7m |
| Scrip consideration | $3.5m |
| Total consideration | $10.5m |
| VMD CY25 revenue | $10.7m |
| Expected annual EBITDA | ~$2.5m |
When big ASX news breaks, our subscribers know first
Combined audience reaches national scale
The Vinyl Group Val Morgan Digital Acquisition positions Vinyl Media’s combined digital audience reach among Australia’s largest media organisations. The integrated portfolio achieves 47% reach in the Entertainment category and 51% reach in the News category, based on Ipsos iris data for January 2026 covering Australia’s total internet audience of 22.1 million people aged 14+.
For context, News Corp Australia commands 63% reach in the News category, Nine reaches 55%, and Seven West Media achieves 40%. In Entertainment, Spotify and Apple each hold 59% reach, while News Corp Australia sits at 22%.
This scale materially strengthens Vinyl Group’s advertising proposition by delivering access to mass audiences across culturally relevant platforms. The acquisition integrates Val Morgan Digital’s premium lifestyle and entertainment assets into Vinyl Media’s existing portfolio, creating an ecosystem capable of delivering brand campaigns at national scale while maintaining engagement with niche interest groups.
Comparative digital audience reach benchmarks:
- Vinyl Media combined (Entertainment): 47%
- Vinyl Media combined (News): 51%
- News Corp Australia (News): 63%
- Nine (News): 55%
- Seven West Media (News): 40%
What is Adaptive Media?
Adaptive Media represents Vinyl Group’s core strategic positioning. The company defines it as an integrated advertising model combining cultural assets, technology and distribution channels to deliver meaningful brand connections at scale.
This approach differs from Legacy Media (broadcast-based mass audience reach) and Social Media (platform algorithm-driven niche targeting). Adaptive Media embeds advertising within cultural assets, enabling brands to connect with audiences through immersive content experiences rather than interruptive ad formats. The model aims to deliver higher ROI by combining the reach traditionally associated with broadcast media with the engagement characteristics of niche-targeted campaigns, executed across multiple distribution channels simultaneously.
Strategic flywheel designed to accelerate returns
Vinyl Group’s presentation outlined a five-stage self-reinforcing growth model. The cycle begins with expanding the ecosystem by acquiring premium cultural assets. This grows the audience through high-quality content and technology-enabled publishing. Larger audiences attract brand advertising spend. Successful campaigns delivering strong ROI enable further asset acquisitions, restarting the cycle with compounding value.
Management highlighted six defensive characteristics of the business model:
- Hard to replicate: Combining numerous cultural assets into an integrated ecosystem presents operational complexity
- Requires scale to achieve profitability: Delivering competitive pricing at meaningful reach demands operational scale
- Requires technology as core capability: Internal AI publishing suite supports content production and distribution
- Not platform dependent: Campaigns operate across multiple channels, reducing reliance on any single social media platform
- Requires both mass and bespoke content creation: Social media forms one component rather than competing directly
- Self-reinforcing flywheel effect: Value compounds with each campaign cycle as ecosystem grows
The company referenced its 2025 Mentos Fresh Sounds campaign as evidence of execution capability. The Adaptive Media campaign delivered 9.7 million impressions and 7 million reach, exceeding booked benchmarks. It generated 961 artist submissions against an expected 300, demonstrating active audience participation. Video engagement reached 19.6% compared to a 5% target.
Damian Keogh joins the board
Board Appointment
HOYTS Group CEO Damian Keogh will join the Vinyl Group Board of Directors following completion of the acquisition.
Damian Keogh has served as CEO of The HOYTS Group since 2014, overseeing 60 cinemas across Australia and New Zealand, along with Val Morgan’s cinema, outdoor and digital advertising operations in ANZ and the Middle East. During his tenure, he led a $300 million investment programme that delivered powered recliners across mainstream cinemas, 15 new or acquired sites, and more than 30 refurbishments. HOYTS’ market share in Australia grew from 18% to 27%.
Before joining HOYTS, Keogh held senior roles at Channel Seven and Foxtel. He became CEO of Val Morgan in 2011, where he helped grow revenue from $50 million to over $180 million by 2024. His professional basketball career spanned 16 years in the NBL, including captaining the Sydney Kings and representing Australia more than 200 times across three Olympic Games and three World Championships.
The next major ASX story will hit our subscribers first
Financial trajectory and upcoming catalysts
Vinyl Group’s presentation outlined a path to consistent profitability. Q2 FY26 delivered positive operating cash flow. Management stated the company expects Q4 FY26 to achieve positive EBITDA and operating cash flow, establishing a foundation for consistent positive earnings on a quarterly basis.
FY27 projections include the full-year impact of the Val Morgan Digital integration, with an additional $2 million in annual synergy realisation. The company also expects to benefit from the full-year effect of cost optimisation measures implemented in H1 FY26.
Key financial metrics:
- Q2 FY26: Positive operating cash flow achieved
- Q4 FY26: Positive EBITDA and operating cash flow expected
- FY27: Additional $2m in annual synergies from VMD integration
Management outlined upcoming catalysts across multiple timeframes:
- Q3 FY26: Further expansion of cultural assets through mergers and acquisitions
- Q4 FY26: Integration of newly acquired assets into Vinyl Media ecosystem
- 1H FY27: Relevant technology acquisitions to enhance the strategic flywheel
- FY27 and beyond: Global growth potential
The acquisition positions Vinyl Group to accelerate revenue growth while improving operational leverage. The combination of organic growth, acquisition-driven scale and cost synergies aims to deliver expanding margins as the business moves through the integration phase into operational scaling.
Want the Next Tech Breakout in Your Inbox?
Join 20,000+ investors receiving FREE ASX tech alerts within minutes of release, complete with in-depth analysis. Click the “Free Alerts” button at Big News Blast to get breaking news the moment it hits the market, before others react.