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KIT digital (KITD) Acquires Accela Communications and Megahertz Broadcast Systems

PRAGUE, CZECH REPUBLIC — (Marketwire) — 09/09/10 — KIT digital, Inc. (NASDAQ: KITD), the leading global provider of video asset management solutions (VAMs) for multi-screen IP-based delivery, has acquired Accela Communications, Inc. (based in Southborough, Massachusetts) and the assets of Megahertz Broadcast Systems, Ltd. (based in Ely, United Kingdom).

“These acquisitions extend our leading market share position for enterprise-level video asset management products and services across the multiple screens of the mobile and tablet device, browser and IP-enabled television,” said KIT digital’s chairman and CEO, Kaleil Isaza Tuzman. “They are consistent with our acquisition strategy of geographical and sales vertical expansion, and we expect them to be accretive on both a revenue and cash-flow basis.”

Accela Communications Acquisition
Accela Communications is a privately-held provider of on-demand, video-based enablement and measurement tools.

KIT digital paid consideration of approximately $4.7 million (net of working capital adjustment), comprised of $1.8 million in cash and 332,763 shares of KIT digital common stock. Stock consideration is subject to lock-up provisions, and will help ensure management’s long-term commitment and upside in the combined digital business. Based on its most recent August results, Accela derives in excess of $3.7 million in annualized recurring licensing fees from its interactive video and multimedia software solutions.

“Our acquisition of Accela, while relatively small, is highly synergistic,” said Lou Schwartz, head of the Americas for KIT digital. “Accela enhances KIT digital’s market scope through its deep experience in particular industry vertical segments amongst its client base: healthcare, information technology, and financial services. Accela also adds strong sales channel partnerships. At the same time, KIT digital brings multi-screen VAMs capabilities which can be upsold to Accela’s enterprise customer base, along with other extended solutions and services.”

Accela’s online video platform, AccelaCast, supports the production, delivery and measurement of interactive video and multimedia communications, providing corporate clients greater audience engagement and learning across a wide range of industries.

AccelaCast allows organizations to create unique multimedia programs through customized design, navigation and data collection options. These clients can then manage and monetize those interactions through the AccelaWorks data acquisition, measurement, classification and delivery system.

Accela serves more than 150 corporate customers, including Alcatel-Lucent, CA, EMC, Hitachi Data Systems, Haymarket Medical, HP, IDG, International Medical Press, McAfee, Motorola, Multiple Sclerosis Association of America, Rogers, SAP and Xerox. Accela sells both directly and through value-added reseller relationships — sales channels which will now apply to the broader KIT VX solution set sold by KIT digital.

Bill Reinstein, Accela president and CEO, commented: “We are very excited to be teaming with the global leader in IP video management, particularly given KIT digital’s strong mobile, live event and connected TV delivery capabilities. Our collective strengths should yield exceptional value and unique benefits for our newly combined global customer base. Our organizations also share a customer-centric culture and a disciplined approach to operational and financial management.”

KIT digital will progressively transition Accela’s clients to the data layer of its VX-one software platform, while maintaining AccelaCast’s client-facing reporting, measurement and interactive audience engagement modules.

Southborough, Massachusetts will continue to be home to Accela’s 30+ employees, and will become KIT digital’s New England sales and account management hub.

The acquisition of Accela Communications closed Wednesday, September 8, 2010.

Megahertz Broadcast Systems Acquisition
Megahertz Broadcast Systems is a broadcast video systems integrator, serving leading broadcasters, MSOs and telecommunications providers in advanced digital video and IP-based implementations. Megahertz has particular expertise in complex, in-the-field video capture and distribution systems, including outside-broadcast (OB) vehicles and remote news gatherers.

Under the terms of the acquisition, KIT digital will acquire 100% of Megahertz’s assets from its Canadian parent company, AZCAR Technologies, Inc., in exchange for $2.7 million in net cash and certain stock-based management incentive agreements. Based on its most recent August results, Megahertz derives in excess of $4.5 million in annualized revenues from its long-term client services relationships and maintenance contracts.

“Megahertz is one of the most respected providers in the advanced digital video systems integration market and our respective teams have competed in the market over the years,” said Isaza Tuzman. “This acquisition removes a competitor and extends our existing advanced digital and IP video systems integration capabilities — which support our larger-scale software implementations with broadcasters and network operators. It also underlines our mission of bridging the gap between traditional broadcast and new media for our customers, as we offer global professional service and implementation capabilities which are demanded by large customers and are notably absent in our competitive segment.”

Megahertz has historically been strongest in the Europe, Middle East & Africa (EMEA) zone, and clients include Al Jazeera, APTN (UK), ART, BBC, British Telecom, BSkyB, CNN, eTV (South Africa), Fiji TV, Goldman Sachs, ING Barings, Kuwait TV, Qatar Radio & TV, RTBF, RTE, SIS, Telenor, TF1 and TV4 Sweden.

Tomas Petru, president of integration services at KIT digital, commented: “We plan to cross-sell our VX-one video management platform — with a special focus on mobile video and IPTV cable distribution capabilities — into Megahertz’s existing client base while leveraging Megahertz’s integration and implementation expertise across our largest clients in Western Europe, the Middle East and Africa. Combined with our acquisition of Singapore-based Benchmark Broadcast Systems earlier in the year, the Megahertz acquisition affords additional synergies and gives us a truly global footprint for high-end video asset management deployments for major broadcasters and network operators.”

Frances Jarvis, managing director of Megahertz, said: “This was the right strategic move for us. The broadcast systems integration and IP-based VAMs fields are clearly converging, as the industry as a whole moves to IP-based workflow. KIT digital is emerging as the only company that clearly understands this convergence and is providing end-to-end video management capabilities for industrial-grade users of video. Given our more than two decades of experience serving content owners and network operators globally, we believe the sales synergies and respective strengths in IP video and broadcast technologies between our companies are unique and powerful.”

Ely, UK will continue to be home to Megahertz’s 20+ employees and full-time consultants, and will become an integral part of KIT digital’s existing EMEA sales and account management activities. The companies will be jointly presenting their products and solutions at the annual IBC Conference in Amsterdam, the Netherlands on September 9-14, 2010.

The acquisition of the assets of Megahertz Broadcast Systems is expected to close today Thursday, September 9, 2010.

Pro forma of the issuance of common shares and cash outlay related to the purchase price for these two acquisitions, KIT digital estimates it will have approximately 23.7 million shares outstanding, and hold in excess of $58 million in cash and equivalents. The company expects there will be modest restructuring and integration costs related to the acquisitions, totaling not more than 50% of the original, combined purchase price.

About Accela Communications, Inc.
Accela Communications is a marketing technology company that provides software and services to produce, deliver and measure interactive, IP-based video communications across a wide range of industries including healthcare, information technology, financial services and marketing services. The company creates opportunities for market and audience engagement with the AccelaCast® multimedia platform and the AccelaWorks® data acquisition, measurement, classification and delivery system. The company generates actionable results through its Healthcare Solutions Group for all of the top twenty pharmaceutical companies, as well as for customers like HP, EMC, SAP, Thermo Fisher Scientific and others. For more information about Accela, visit

About Megahertz Broadcast Systems, Ltd.
UK-based Megahertz Broadcast Systems is one of the world’s premier independent broadcasting systems integrators. Megahertz experience covers every aspect of systems implementation from engineering planning, project management, design, product evaluation, commissioning, training, support and IT services. Megahertz has completed turnkey projects for some of the world’s leading broadcasters, telecommunication and digital media companies. Megahertz has constructed sophisticated IP-based news gathering solutions and HD broadcast facilities as well as “best of breed” outside broadcast vehicles. For additional information, visit

About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading global provider of video asset management solutions (VAMs) for multi-screen IP-based delivery. KIT VX-one, the company’s family of end-to-end software platform solutions, enables enterprise clients to acquire, manage and distribute video assets across the three screens of today’s world: the personal computer, mobile device, and IPTV-enabled television set. The application of VX ranges from commercial video distribution to internal corporate deployments, including corporate communications, human resources, training, security and surveillance. KIT digital’s client base includes more than 1,000 customers across 40+ countries, including The Associated Press, Best Buy, Bristol-Myers Squibb, Disney-ABC, FedEx, General Motors, Google, Hewlett-Packard, Home Depot, IMG Worldwide, ESPN Star, MediaCorp, News Corp, Telefonica, Verizon and Vodafone. KIT digital is headquartered in Prague, and maintains principal offices in Atlanta, Beijing, Buenos Aires, Cairo, Chennai, Cologne, Delhi, Dubai, Kolkata, London, Melbourne (Australia), Mumbai, New York, Singapore, Stockholm and Toronto. For additional information, visit or follow the company on Twitter at

KIT digital Forward-Looking Statement
This press release contains certain “forward-looking statements” related to the businesses of KIT digital, Inc. which can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “estimates,” “expects” or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product development and commercialization, the ability to obtain or maintain patent and other proprietary intellectual property protection, market acceptance, future capital requirements, regulatory actions or delays, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our public filings with the U.S. Securities and Exchange Commission. KIT digital is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

KIT digital Contact:
Adam Davis
Global Communications Manager
Tel. +1-609-468-9500
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KIT digital Investor Relations Contact:
Matt Glover or Geoffrey Plank
Liolios Group, Inc.
Tel. +1-949-574-3860
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Thursday, September 9th, 2010 Uncategorized