Vinyl Group has bought Rolling Stone publisher The Brag Media

Former musician turned tech billionaire Richard White has backed Vinyl Group’s buyout of Rolling Stone owner The Brag Media to the tune of $11m.

Former guitar repairer, now tech billionaire Richard White. Picture: Jonathan Ng

He once repaired guitars for AC/DC, now Wisetech founder and billionaire Richard White has backed Vinyl Group’s acquisition of Rolling Stone’s local publisher The Brag Media with an $11m debt and equity deal.

The deal will take Mr White’s stake in Vinyl Group - previously known as Jaxsta - to 34.81 per cent, after an initial investment earlier this year.

The company, led by chief executive Josh Simons, owns what it says is the world’s largest database of official music credits, and also operates talent-focused social networking and marketplace site Vampr.

In the deal announced on Thursday, Vinyl Group will buy The Brag Media, which publishes Rolling Stone, Variety, Billboard, and other titles in Australia. The company also has a native content and an events business.

“The Brag Media’s offering includes multiple online platforms, native editorial and music and entertainment content and events,’’ Vinyl Group told the ASX.

AC/DC on the cover of Rolling Stone.

“In the past 12 months, the publisher has produced campaigns for brands including Adidas, Jim Beam, Tourism NT and more. It also produces The Variety Australia CMO Dinner, The Rolling Stone Australia Awards in Sydney and the Rolling Stone Aotearoa Awards in Auckland each year.

“The Brag Media publishes owned outlets TheBrag.com, The Music Network and Tone Deaf, and Penske Media Corporation (PMC) titles Rolling Stone and Variety in Australia and New Zealand.

“It also exclusively represents local digital audiences for over a dozen other titles including HypeBeast, Billboard, The Hollywood Reporter, Music Feeds, ComingSoon, Rotten Tomatoes, Game Revolution and IndieWire.”

Brag claims to reach about 10 million users per month and generate more than 40 million page views.

Mr White is bankrolling the deal through his RealWise Group investment vehicle, putting in $3.9m at 4.4c per share, plus another $7m in the form of a convertible note.

Mr White will move to own more than a third of the business should shareholders approve the investment.

Mr White is a former musician whose first business was Rock Repairs - repairing guitars for bands including AC/DC and The Angels.

He said there was “no doubt that iconic brands like Rolling Stone and Variety make sense and add value to Vinyl Group”.

“I have watched closely as Josh has built Vinyl Group’s revenue and made substantial business gains since taking my initial investment.

“I’ve also noted that Luke and his dedicated team at The Brag Media have rapidly grown Brag into one of Australia’s most influential media and creative businesses.’’

Vinyl group will pay $8m in cash for The Brag Media, with a further $2m payable on a deferred basis depending on the achievement of revenue and earnings milestones.

“The deferred payment will be based on a sliding scale after achieving both a minimum revenue of $12m and a minimum EBITDA of $2m up to a maximum of $15.5m in revenue and EBITDA of $2.8m.

“Unaudited financial year 2023 results highlight The Brag Media generated $8.39m in revenues including $334,824 in net profit.

“The Brag Media has seen average revenue growth of 125 per cent over the past two financial years. The indicative combined Vinyl Group revenue as at 30 June, 2023 would have been $9m.’’

The Brag Media chief executive Luke Girgis will stay on as part of the deal for a minimum two year term, and will receive five million options on the completion of the sale, with performance conditions attached.

Mr Simons said there were “several impactful synergies” between the two businesses which would deliver immediate savings and revenue “including streamlining Vampr’s in-app ads business and leveraging The Brag Media’s impressive audience reach to bolster Jaxsta, Vinyl.com and Vampr in the market.”

Vinyl group’s shares were 17.7 per cent higher at 5.3c in early trade. The company was valued at $23.2m before the deal was announced.