Kit Digital picks up Sezmi assets, clients for $27M
Sezmi has been purchased by Kit Digital for about $27 million in stock and cash. Both companies specialize in cloud-based multi-screen delivery, notably with capabilities to distribute video on LTE wireless networks.
Kit secures some new clients it finds valuable and also picks up a set of 18 patents that cover various aspects of over-the-top (OTT) platform provision in the mobile, online and digital terrestrial television (DTT) environments.
Sezmi had rolled out an OTT service that combined local broadcast stations and some cable network channels in several dozen U.S. cities. But that service never caught on, and the company abandoned it last September.
The company is now instead focusing on service provider clients with its cloud-based system for distributing licensed or owned video content to subscribers across mobile and IP-connected home entertainment devices. Kit said customers "historically include a leading Mexican mobile operator, Iusacell, and a major Southeast Asian MSO, YTL Communications."
"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.
"Sezmi also adds key clients in markets that we have previously highlighted as our highest priorities, specifically Asia-Pacific and Latin America, where we see significant greenfield growth opportunities," continued Campion. "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. This will allow Kit digital to drive growth in developing markets with low terrestrial broadband penetration."
The deal breaks down as approximately $16 million in cash (including the assumption of liabilities) and approximately $11 million in Kit common stock (or approximately 1.2 million shares). The price could go up if Sezmi operations hit unspecified performance goals.
Kit Digital, meanwhile, has been on a bit of a roll, having signed over 35 net new and extended customer contracts globally in just the last year.
Kit's customers include AOL, eTV (South Africa), Grupo Clarin (Argentina), Liberty Global, NBCUniversal, OSN (UAE), Prisa (Spain), SA TV (Bangladesh), Starhub (Singapore), Telecom Argentina, The Walt Disney Co. and the U.S. Olympic Committee. IBM was also added as a key new technology, marketing and deployment partner. Kit Digital's client base totaled more than 2,450 customers at Dec. 31.