Kit Digital Buys The FeedRoom, Nunet

Written by Ryan Lawler

Monday, October 5. 2009 at 04:25 PM EDT Post a comment

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Kit Digital made not one, but two (!!!) acquisitions over the weekend, picking up the assets of New York-based The FeedRoom and German mobile video firm Nunet AG for a total of $20.9 million.

Kit Digital's acquisition of The FeedRoom comes after much speculation that the company would be acquired last week. Kit paid $9.8 million in stock for the online video platform provider, based on the closing price of Kit Digital stock on Friday.

For that sum, Kit is picking up approximately $6 million in revenues, and a host of customers in the enterprise and government sectors, including Barnes & Noble, Best Buy, Hewlett-Packard, Intel, and the U.S. Department of Defense.

Kit Digital plans to continue offering The FeedRoom's front-end "Studio" software, which houses the video management, reporting, and analytics functions. The company plans to integrate The FeedRoom's front end with its own VX management platform. The idea is to make the user experience the same, while adding features VX has that The FeedRoom doesn't have, including the ability to deliver video to mobile devices and IP set-top boxes.

The acquisition marks an inglorious end to The FeedRoom, which has raised more than $60 million over the course of 10 years. That amount includes more than $20 million since it switched gears and became a video managment company. The FeedRoom's last round of financing, announced in in July 2008, was worth $12 million and included NewSpring Capital, BEV Capital, and Velocity Equity Partners.

Kit Digital also acquired the assets of German mobile video distribution firm Nunet from IMG Worldwide for $11.1 million in cash and debt. Through the acquisition, Kit Digital will be picking up one of the leading mobile video distribution platforms outside of North America, with service provider clients such as Vodafone, Vodacom, and Mobilkom, as well as media customers like MTV Networks and Discovery Channel.

Nunet is expected to bring approximately $11.5 million in annualized revenues and $2.3 million in annualized EBITDA -- and that's before "merger-related synergies" kick in.

For Kit Digital, the acquisitions add a quick sales boost. For its investment of $20.9 million, the company expects to get back about $17.5 million in annualized revenues from the two companies, and approximately $4.5 million in annualized EBITDA.