Kit Digital Files S-3 Form with SEC, May Sell up to $250m of Stock in Order to “Maximum Strategic Flexibility”

Posted by Joe Zaller
Oct 14 2010

In a move that it calls favorable for our current and prospective shareholders, IPTV asset management provider Kit digital has filed a Form S-3 “shelf registration” statement with the SEC.

According to the company’s press release, Kit digital may under this shelf registration sell shares of its common stock in one or more offerings up to a total dollar amount of $250m over an indeterminate period.

Last week, the company announced that its shareholders had voted to increase the number of shares outstanding in the company by 167%.  CEO Kaleil Isaza Tuzman said the recently approved increase in shares put Kit digital “in a position to file this S-3, in line with our standing corporate policy of maintaining a large outstanding shelf in order to maintain maximum strategic flexibility.” 

This flexibility apparently includes the possibility of funding large acquisitions. 

According to the company’s S-3 filing, the company that in currently intends to use the estimated net proceeds from the shares of its stock for working capital and “to finance the costs of acquiring, investing in, or creating joint ventures with competitive and complementary businesses, products and technologies as a part of our growth strategy.”

However, in the filing the company said that it has “no current commitments or agreements with respect to any such acquisitions or investments.”

Tuzman said that the company’s existing strategy of acquiring small firms that companies that complement Kit digital’s current structure does not require additional outside equity capital, and will continue to be financed with cash from operations. “However,” said Tuzman, “to the extent that it became feasible to acquire one or more of our top competitors at a reasonable valuation, it is important we have the flexibility to do so—including accessing the capital markets efficiently and quickly.”  Tuzman also said that the shelf registration also it makes it easier for certain types of privately held buyers to evaluate KIT digital.

The company’s press release noted that the S-3 filing was procedural and that its specific use or application has yet to be determined.

“To be clear” said Tuzman, “with more than $45 million in cash on our balance sheet and strong, positive operating cash-flow, we do not have an immediate need to raise capital for corporate purposes or strategic acquisitions at this time. If we choose to sell shares under this shelf registration, it will be with the purpose of closing on an imminent corporate opportunity.”


You can read the full Kit digital press release about the filing here.

Kit digital’s SEC Form S-3 filing can found here.


One Response

  1. Mike says:

    I have a feeling they are going to buy Brightcove. Just a hunch but it makes sense.

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