So much for Sezmi‘s ambitious plans to kill cable TV: the assets of the cloud-based TV delivery platform company were recently acquired by KIT digital for approximately $27 million in a mixture of stock and cash.
Sezmi, founded in 2007 under the name Building B by the former CTO of Sony Music (and later CTO of Sony’s US subsidiary) Phil Wiser and serial entrepreneur Buno Pati, reportedly raised over $70 million.
The Belmont, California-based company shut down its consumer-facing business back in September 2011, and tried to turn the ship around by focusing on selling hardware to service operators, such as telcos and ISPs. Clearly, that didn’t work out so well either.
KIT digital, which provides video management software and related digital services worldwide, says it acquired ‘certain assets and liabilities’ of Sezmi on December 30, 2011.
KIT digital paid approximately $16 million in cash upfront, and approximately $11 million in KIT digital common stock (or approximately 1.2 million shares), plus earn-outs. Notably, future earn-out payments may amount up to $20 million – $25 million over a period of three years, in total, payable either in stock or in cash at KIT digital’s discretion.
As part of the deal, KIT digital has obtained 18 patents from Sezmi, related to “over-the-top (OTT) platform provision in the mobile, online and digital terrestrial television (DTT) environments”.
According to the press release announcing the purchase, Sezmi has approximately 80 full-time employees and contractors in the United States, with another 55 in India.
The company today also raised its financial guidance for 2012; KIT digital management says it now expects annual revenues of at least $320 million, as compared to $300 million previously. KIT digital plans to report preliminary Q4 2011 financial results in February.