In the midst of a major buying spree, KIT digital has announced another purchase today—Ioko, a software and technology services provider for multi-screen video delivery. KIT Digital, the provider of video asset management software and related services, will pay approximately $74 million in cash and 1,509,805 restricted shares of KIT common stock, with a total deal value of $91.4 million.
Ioko provides an end-to-end managed cloud-based platform for multi-screen video delivery over connected IP devices to telecommunications cable, media and entertainment companies around the world, with a particular focus on North American, Northern European and Australasian markets. Ioko currently generates approximately $54 million in annual revenues related to IP video asset management, through a combination of recurring managed service fees, software licenses, maintenance fees and professional services.
Ioko’s 50 clients include a number of well-known companies such as AT&T, BBC, BSkyB, Channel 4, Diageo, Disney, Electronic Arts, FOXTEL, Evolution Gaming, ITV, Samsung, Universal Music, and Univision. For example, AT&T used Ioko to build and manage U-verse’s OTT platform in the U.S. The BBC used Ioko for the launch of iPlayer and BBC Monitoring video services.
KIT digital says that it anticipates assuming a relatively small amount of short-term debt at closing, in order to finance ioko’s accounts receivables, which the company expects to pay down quickly. With the addition of Ioko, KIT Digital is expecting of revenues in 2011 of approximately $210 million, or up more than 98% over 2010. After the transaction closes, the company is left with approximately $40 million in cash and equivalents.
Gavin Campion, KIT digital’s president, commented: “We see the ioko acquisition as being squarely aligned with our stated strategic objective of delivering larger and more advanced video deployments. ioko has always been strong in this area and will bring their expertise to bear on our global pipeline and operations as KIT continues to orient itself to larger deals.”
He added that the company will be “focused on internal product development, channel sales, on-the-ground growth in China and other non-M&A related strategic initiatives.” A number of Ioko’s executives will be added to KIT digital’s global management team, including Mark Christie, ioko’s joint global CEO, Scott Sahadi, ioko’s CEO of North America, Allan Dunn, ioko’s CFO and John Griffin, ioko’s global chief sales & marketing officer. ioko has approximately 380 employees and full-time contractors, with offices in San Diego, London, York (U.K.), Malaga (Spain) and Sydney.
This is one of the larger acquisitions for KIT Digital in the past twelve months. The company bought Multicast, BenchMark Broadcast Systems, Brickbox, KickApps, Kewego, Kyte and most recently, Polymedia. KIT is also rumored to be sniffing around Comcast’s thePlatform as well.