Hybrid TV service provider Sezmi, which in September shuttered its struggling consumer service to focus instead on developing a product and technology platform targeted at service providers, has been acquired by KIT digital (Nasdaq: KITD). KIT digital paid about $27 million in stock and cash, plus earn-outs for the company, which was founded in 2006 and has raised more than $75 million.
Sezmi provides a cloud-based TV platform and professional services enabling broadband, mobile and cable service providers to deliver a personalized video entertainment service to their customers. Sezmi's platform is a turnkey, multi-screen solution.
Sezmi in June announced a partnership to include Netgem's set-top-box hardware and software as part of its TV offering. That deal was based on Grupo Iusacell, one of Mexico's leading communications and television services, selection of the company's platform to roll out new services.
Sezmi was an early innovator developing platform software for IP video management. As part of the transaction, KIT digital acquired 18 patents from Sezmi related to over-the-top (OTT) platform provisions in the mobile, online and digital terrestrial television (DTT) environments.
Sezmi has approximately 80 full-time employees and contractors in the U.S., with another 55 in India.
"Sezmi has been an early mover and one of the few direct competitors providing integrated, multi-device platforms for OTT premium content offerings -- with unique capabilities in hybrid 4G/LTE and DTT deployments," commented Gavin Campion, president of KIT digital. "Our companies share a commitment to serving the most complex client needs in our industry, and we are excited to kick off 2012 with the addition of their major clients, valuable technology and patents, and world class personnel."
Sezmi's presence in Latin America and the APAC regions also fits well with KIT digital's longer-term goals, said the company.
"The future of our industry lies in the combination of LTE and broadband, and Sezmi adds leading edge publishing capabilities in these areas that are essential to integrated OTT offerings everywhere in the world," Campion added. "This will allow KIT digital to drive growth in developing markets with low terrestrial broadband penetration."
KIT digital paid approximately $16 million in upfront cash-based consideration (including the assumption of liabilities, some of which may be paid over time) and approximately $11 million in KIT digital common stock (or approximately 1.2 million shares). KIT expects aggregate earn-out payments of between $20 million and $25 million over a period of three years.
- see this release
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