Kit Digital Snags ioko for $91.4M

KIT Digital acquires ioko, solidifies position in IP video management and delivery

April 12, 2011

2 Min Read

PRAGUE, LONDON and SAN DIEGO -- KIT digital, Inc. (NASDAQ: KITD), a premium software and technology services provider for multi-screen video delivery, has signed a definitive agreement to acquire 100 percent of the capital stock of San Diego, California and London, U.K.-based ioko365 Ltd ("ioko") for total prospective net consideration of approximately $79.4 million, including future performance-based incentive payments. (All currency figures are in U.S. dollars.)

ioko provides end-to-end managed cloud-based platform solutions for multi-screen video delivery over connected Internet Protocol ("IP") devices to tier-one telco, cable, media and entertainment companies around the world, with a particular focus on North American, Northern European and Australasian markets. ioko's sophisticated over-the-top ("OTT") capabilities -- allowing premium video services delivered over the Internet to be formatted for and presented on televisions and other connected devices -- and its closed-network IPTV solutions are expected to add further depth to KIT digital's OTT and connected device platform offerings for its network operator and media and entertainment verticals.

ioko currently generates approximately $54 million in annualized revenues related to IP video asset management, through a combination of recurring managed service fees, software licenses, maintenance fees and professional services. The company operates profitably with minimal capex requirements, and is expected to contribute in-line to KIT digital's stated 23% EBITDA margin target for fiscal 2011. Therefore, the acquisition of ioko is expected to be substantially accretive on both an EBITDA and cash-flow multiple basis.

ioko specializes in large-scale, complex deployments and serves approximately 50 clients, including AT&T, BBC, BSkyB, Channel 4, Diageo, Disney, Electronic Arts, FOXTEL, Evolution Gaming, ITV, Liberty Global, LoveFilm, Molson Coors Brewers, Samsung, SeeSaw, Universal Music, Univision and VimpelCom.

"This transaction represents the culmination of a three-plus year dedicated process to achieve global scope and market share in the IP video platform software sector, both from a geographical and capabilities perspective," said Kaleil Isaza Tuzman, chairman and chief executive officer of KIT digital.

Kit Digital

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