Posts Tagged ‘Kaleil Isaza Tuzman’

KIT digital Reports Record Q3 2011 Results, Issues Strong Guidance

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Nov 10 2011

KIT digital reported that its revenue for the third quarter of 2011 was $62.3m, an increase of 124% versus the same period last year, and up 29% versus the previous quarter.  Excluding the contribution from acquisitions, the company’s revenue was up 35% versus last year and up 11% versus last quarter on a pro forma basis.

The company said that 71% of its revenue in the third quarter of 2011 were related to video platform fees, and approximately 29% were derived from fees related to broadcast systems integration, solutions and interface design, content transformation and other professional services.

Significantly, the company posted GAAP net income of $4.8m for the quarter.  This is the first time that Kit Digital has posted GAAP net income.  During the third quarter of 2010, the company posted a GAP net loss of $8m.  Last quarter the company’s GAAP net loss was $19.8m.  On a non-GAAP basis, the company said its EBITDA for the quarter was $14.3m, up 223% over Q3 2010.

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Strong Guidance

KIT digital says it expects its Q4 2011 revenue to be at least $67m, representing a prospective 8% sequential and organic increase over Q3, and up 74% from the same year-ago period. This Q4 guidance implies a revenue expectation for the full year of 2011 of approximately $212m, representing an increase over 2010 of approximately 100% overall and more than 35% organically.

The company also said it expects record operating EBITDA in Q4 2011 of approximately $17.5m, representing an increase of over 20% sequentially, and up over 150% versus the same period a year ago.

The company also reaffirmed the expectation of at least $300m of revenue in 2012m, with an organic growth rate of approximately 25-30%.

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“These record results, particularly in what has historically been a seasonally weak quarter, reflect our ability to drive strong organic revenue growth while increasing the operating leverage and margin profile of our business,” said KIT digital’s chairman and CEO, Kaleil Isaza Tuzman. “The third quarter marked an important milestone for the company, as we crossed over to GAAP net profitability and recognized the last remaining restructuring and integration charges related to the acquisitions we completed in the first half of the year. This will allow us to take advantage of strong free cash flow generation going forward, which we expect to be at least $2.5 million per month by the end of Q4.

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Related Content:

Press Release: KIT digital Reports Record Q3 2011 Results

Previous Quarter: Kit Digital Reports Wider Losses as Revenue Doubles in Q2 2011

KIT digital Revenues Jump 98%  in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says larger Acquisition is Coming

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Kit Digital Reports Wider Losses as Revenue Doubles in Q2 2011

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 09 2011

KIT digital, reported that its revenue for the second quarter of 2011 was $48.2m, an increase of 40% versus the previous quarter and an increase of 109% versus the same period a year ago. The company said the increase in revenue is attributed to both organic growth and the contribution of newly acquired companies.

The GAAP net loss for the quarter was $19.8m versus a GAAP net loss of $12.5m last year, worse than expected by analysts. The company said that the quarterly loss included more than $12m in net non-cash charges.

Revenue from the company’s Europe, Middle East & Africa (EMEA) region constituted more than 50% of the total during the second quarter, with the remainder approximately split between the Americas and Asia-Pacific regions.

The company said it added more than 35 net new clients during the quarter, with an average revenue per month per customer (ARPU) of more than $30,000.  Kit digital’s had  more than 2,300 customers at June 30, 2011.

“Our pace of internal growth strengthened during the quarter, driving annualized organic revenue growth within our 30-35% target range,” said Kaleil Isaza Tuzman, chairman and CEO of KIT digital. “KIT digital continues to operate in the ‘sweet spot’ of the global transformation of traditional broadcast television and one-way video communications to multi-screen, OTT and social video solutions.”

 

Guidance:

The company said it expects revenues in Q3 2011 to be more than $61m, impling an organic growth rate of approximately 40% annually relative to Q2 2011, after back-dating acquisitions completed in Q2 to the beginning of the quarter. For the full year of 2011, the company reaffirmed its revenue guidance of approximately $210 million, which would represent an increase over 2010 of more than 95% overall and more than 30% organically.

Management also continues to expect an operating EBITDA margin target of 23% for the full year of 2011, with the goal of achieving in the vicinity of a 30% EBITDA margin on a monthly basis by the end of 2012.

 

 

Related Content:

Press release: KITdigital Reports Record Q2 2011 Results

KIT digital Revenues Jump 98%  in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says larger Acquisition is Coming

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Kit Digital Says it Expects Report Record Revenues for Q2 2011

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Jul 19 2011

KIT announced that it expects to report record revenues when it announces it full Q2 2011 results on August 9th, 2011.

Based on preliminary unaudited information, the company says it had Q2 revenue of approximately $48m, an increase of 39% versus the previous quarter and an increase of 108% versus the same period a year ago. The company said the increase in revenue is attributed to both organic growth and the contribution of newly acquired companies.

The company says it expects to book a net loss for the quarter on a GAAP basis, and that it will take a charge of approximately $10m charge for restructuring and integration.

Operating EBITDA, a non-GAAP metric which management uses as a proxy for operating cash-flow, is expected to total approximately $9.5m, up 34% from the previous quarter and up 125% from the second quarter of 2010.

The company said it added more than 35 net new clients during the quarter, with an average revenue per month per customer (ARPU) of
more than $30,000, which is consistent with the company’s ongoing focus on higher-end opportunities in the market and large, multi-year contracts in emerging sectors and geographies. The company’s client base totaled more than 2,300 customers at June 30, 2011.

Company management reiterates its guidance of approximately $210m in reported revenues for the full year of 2011, which would represent an increase over 2010 of more than 95% overall and between 30% and 35% organically.

The reaffirmed  its expectation of a 23% EBITDA margin for the full year of 2011, with a medium-term goal of approaching a 30% EBITDA margin over the next two years. The company also reiterates it expects to be generating approximately $2.5m in monthly free cash-flow by the end of Q4 2011.

Company chairman and CEO Kaleil Isaza Tuzman said “We are seeing growth in our business accelerating going into the back half of
2011, despite the necessary distractions of M&A integration during the past quarter and our business being a ‘larger ship’ than before. We are confident we will achieve the financial targets and product release schedule that we have set out for ourselves this year, and we are poised for a strong 2012.”

 

Related Content:

Press Release:  KIT digital Expects Q2 2011 Revenue Up 39% to Record $48 Million; Op. EBITDA Up 34% to Record $9.5 Million

KIT digital Revenues Jump 98% in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says larger Acquisition is Coming

 

 

 

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KIT digital Revenues Jump 98% in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
May 10 2011

IPTV asset management provider KIT digital reported that its revenue for the first quarter of 2011 was $34.5m, an increase of 98% versus the same period a year ago and an increase of 5% versus the previous quarter.  On an organic basis, revenue increased approximately 38% versus the same period a year ago.

The company posted a GAAP net loss of $12.5m for the quarter, compared to a GAAP net loss of $18.4m last year, and a GAAP net loss of $8.5m in the previous quarter.  The GAAP net loss includes $7.3m in non-cash charges and $12m in restructuring and integration expenses related to the reorganization and integration of recently acquired companies.

Operating EBITDA (a non-GAAP metric which the company uses as a proxy for operating cash-flow) was $7.1m in first quarter of 2011, increasing 5% sequentially and 139% over the same year-ago quarter.  Operating EBITDA margin increased from 17.4% in the fourth quarter of 2010 to 20.5% in the first quarter of 2011, largely due to the reduced portion of professional services-related revenues and the increase in software fee-related revenues.

KIT’s CFO Robin Smyth said the company will “adopt a traditional EBITDA metric and demonstrate strong free cash-flow generation” once it has “cycled through the necessary restructuring and integration charges from recent acquisitions.” This will happen by the third quarter, he said.

Following the payment of consideration related to the acquisitions of ioko and Polymedia, as well as all related restructuring and integration charges and advisory fees, KIT digital expects to have approximately $38 million in cash and equivalents.

Company chairman and CEO Kaleil Isaza Tuzman said he was very pleased with the results of the first quarter, “particularly when you consider the lower digital media usage levels and consequent negative seasonality of Q1 over Q4 throughout the industry.”

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Financial Guidance:

Because much of KIT’s growth has come via M&A, including the recent purchases of Kewego, KickApps, and Kyte (January 2011), Polymedia (March 2011) and ioko (April 2011), KIT management provided new guidance that includes all recently acquired businesses.  The company now estimates that it will report approximately $48m of revenues in the current second quarter (including contributions from ioko and Polymedia), and reiterated its estimates of approximately $210m of revenues and 23% EBITDA margin for fiscal 2011.

Tuzman added: “We are also glad to report we have completed the bulk of the restructuring work related to our acquisitions to date, and expect below-the-line restructuring and integration charges to approach zero by the beginning of the third quarter — two to three months earlier than we originally anticipated. This should allow us to report a ‘clean’ back-half of 2011, without adjustments to cash EBITDA, allowing for a harmonization of EBITDA and more traditional GAAP and cash-flow metrics.”

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Organic Growth Strategy:

The company says that its recent M&A activities have enabled it to reach its long-stated goal of  a 45-50% market share in the IP video platform software sector, and that it will now focus on organic growth.  “Going forward, we expect the pace of our M&A activity to slow dramatically, as we optimize what we have acquired,” said Tuzman.

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Related Content:

Press Release: KIT digital Reports First Quarter 2011 Results

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

More Broadcast Vendor M&A: KIT digital Acquires Polymedia for $34.4m

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says larger Acquisition is Coming

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More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

broadcast technology market research, Broadcast Vendor M&A | Posted by Joe Zaller
Apr 11 2011

IPTV asset management solutions provider Kit digital capped a multi-year acquisition spree last week with the purchase of ioko365, a provider of managed cloud-based platform solutions for multi-screen video delivery, for $79.4m.

Kit digital has made no secret of its intention to grow its market share through strategic M&A activity, and the company’s execution has been interesting to watch:

 

With the announcement of its intention to purchase ioko, Kit digital has finally revealed its long hinted-at “transformative” deal.

Company chairman and CEO Kaleil Isaza Tuzman said the ioko deal “represents the culmination of a three-plus year dedicated process to achieve global scope and market share in the IP video platform software sector, both from a geographical and capabilities perspective. It also represents the successful conclusion of a carefully managed acquisition process for which we raised outside equity capital in December 2010, and which necessitated the navigation of complex shareholder and regulatory challenges.”

According to Kit digital, ioko has 380 employees and full-time contractors and $54m in revenue, comprised of a combination of recurring managed service fees, software licenses, maintenance fees and  professional services. Kit says ioko is profitable, and that it expects the deal to be accretive on both an EBITDA and cash-flow multiple basis.

Based on the closing price of KIT digital common stock of $11.51 on April 8, 2011, the total gross consideration KIT digital will pay upfront for ioko is approximately $91.4m, comprised of $74m in cash and 1,509,805 restricted shares of KIT common stock. After adjusting for approximately $19m of cash and approximately $9m of additional positive net working capital expected on ioko’s balance sheet at the time of closing, the net upfront consideration to be paid for ioko is expected to be approximately $63.4m on a debt-free and cash-free basis.  The net upfront consideration of $63.4m is exclusive of performance-based earn-outs, incentive and personnel retention payments, which are estimated not to exceed $16m over a period of two and a half years after closing, payable in KIT digital restricted stock. Therefore, over time, prospective net consideration is expected not to exceed $79.4m in total.

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Related Content:

KIT digital Acquires ioko, Solidifies Position as Global Leader in IP Video Management and Delivery

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says Larger Acquisition is Coming

More Broadcast vendor M&A: Kit digital Acquires Polymedia for $34.4 Million

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

KIT digital Sells $110.4 Million of Stock, Says it will use Proceeds for Broadcast Industry M&A

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KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Mar 17 2011

IPTV Asset management provider Kit digital reported that its revenue for the fourth quarter of 2010 was $38.4m, more than double the same period a year ago, and an increase of 39% versus the previous quarter.   

The company posted a net loss of $8.5m on a GAAP basis during the quarter, compared to a net loss of $8m in the previous quarter, and a net loss of $15.6m during the same period a year ago

On a geographic basis, the EMEA region contributed approximately 45% of revenue during the quarter, with Asia-Pacific and the Americas contributing 35% and 20% respectively.

For the full year 2010, the company posted a GAAP net loss of $35.3m on revenue was $106.6m.  Revenue increased 125% versus 2009.  EBITDA (a non-GAAP measure) for the year was $18.3m. On a geographic basis, the EMEA region contributed approximately 54% of revenue in 2010, with Asia-Pacific and the Americas contributing 25% and 21% respectively.

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Revenue Guidance
In guidance issued in November 2010, the company said it expects to achieve revenue in excess of $137.5 million for fiscal 2011, with an EBITDA margin of approximately 24%. This guidance was issued prior to any its recent M&A activity.

Company chairman and CEO Kaleil Isaza Tuzman said that the revenue guidance from November 2010 will be revised up based on the M&A activity, including the recent acquisitions of KickApps, Kewego and Kyte, which were announced at the end of January 2011.  “If you overlay our organic, pre-acquisition revenue target of $137.5 million with the estimated annualized run-rate of recently acquired companies — totaling around $44 million — and adjust for the approximate date of closing and any seasonality for each — it provides for an expectation of revenues in 2011 in excess of $170 million, or up more than 60% percent over 2010.”

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M&A Plans Still on Track
Much of Kit digital’s growth has been based on the numerous acquisitions the company  has made, including the recent deals for KickApps, Kewego, Kyte, and the recently announced Polymedia.  The company says it “purposefully sequenced” these deals to happen prior to a “material acquisition” that the company has been hinting at for several quarters.

Last year, Kit digital raised $110m through a stock offering, and said much of the proceeds would be used to fund M&A activities.  During the company’s earnings call with analysts, Tuzman said that the majority of these funds “continue to be dedicated to support a prospective larger acquisition in the very near future.”

Tuzman says that KIT digital plans to announce this larger transaction by the end of Q1 or in early April.

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Related Content:

Kit digital Q4 and FY 2010 earnings press release

Kit digital Q3 earnings information

Kit digital buys KickApps, Kewego, and Kyte

Kit digital sells $100m of stock, says proceeds will be used to fund broadcast industry M&A activities.

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More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says Larger Acquisition is Coming

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Jan 31 2011

IPTV asset management solution provider Kit digital said today that it has acquired New York City-based KickApps, Paris-based Kewego, and San Francisco-based Kyte, for a total of $77.2m in three separate cash and stock deals.  Approximately $62.3m will be paid in KIT digital common stock, and approximately US$14.8 million paid in cash.

Although the announcement comes just six weeks after the company closed a $110m stock offering that it said would be used to fund industry M&A activities, company Chairman and CEO Kaleil Isaza Tuzman said that “these acquisition discussions pre-date our public equity offering completed in December 2010; we have sequenced events purposefully and the proceeds from that offering continue to be dedicated to support a larger acquisition which we are currently on track to announce later this quarter.”

New York City based KickApps is a provider of solutions that enable the creation and management of web based video, including a suite of hosted social and media applications and services designed to drive customer engagement.  KickApps’s 2010 revenue was approximately $12m, derived almost entirely from recurring software license fees. The company, which has had three venture rounds, has raised approximately $32m since it was founded in 2005.

Paris based Kewego provides video asset management solutions for managing, broadcasting and monetizing videos on IP connected devices. It reported fiscal 2010 revenues of approximately US$10.2 million, the large majority of which was derived from recurring software license fees. Kewego is profitable on a standalone basis.   The company has raised $19.4m since it was founded in 2003.

San Francisco based Kyte provides a content publishing platform that enables companies to deliver live and on-demand video experiences to websites, mobile devices and connected TVs. Kyte reported fiscal 2010 revenues of US$3.7 million, derived primarily from SaaS platform fees.  Kyte has raised $23.4m from investors since it was founded in 2006.

The company’s press release presented the benefits of these transactions as follows:

  • Acceleration of KIT’s product roadmap by 12-18 months by adding several key technology and product features, including advanced social media tools (KickApps), superior mobile publishing and software development kit (SDK) features (Kyte), and behind-the-firewall and digital signage capabilities for enterprise clients (Kewego);
  • KickApps’ applications and development tools deepen KIT’s ability to integrate new technology assets and form the foundation for accelerated client deployments;
  • Support and extension of KIT’s three major client verticals, adding particular expertise around transportation, automotive, manufacturing and fan-based media assets (such as sports teams and celebrity sites);
  • Strong management additions to KIT’s global team, including R&D and business development hubs in San Francisco and New York;
  • Aggregate transaction accretive on both a trailing revenue and EBITDA multiple basis;
  • Combined 2010 revenues of acquired companies is estimated to have been approximately US$25 million, the vast majority of which was derived from recurring licenses in a software-as-a-service (SaaS) business model;
  • The acquired companies have been growing between 20-35% per year historically on a standalone basis;
  •  Quality new shareholders, including the appointment to the KIT digital board of Santo Politi, founder and general partner of Spark Capital, the venture capital firm behind Twitter, Boxee and thePlatform.

 

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

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KIT digital Sells $110.4 Million of Stock, Says it will use Proceeds for Broadcast Industry M&A

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Dec 10 2010

IPTV asset management solutions provider KIT digital said that it sold $110.4m of common stock in a recent public offering, netting the company approximately $102.5m after expenses.

As announced previously, the company says that it plans to use the proceeds of the offering “primarily to acquire and invest in competitive and complementary businesses as part of its growth strategy.”

Company chairman & CEO Kaleil Isaza Tuzman said that the company’s plan is to increase its market penetration from “current estimated 20-plus percent global market share to more than 50 percent within the next 24 months … through a vanguard of organic growth complemented by highly selective, accretive acquisitions.”

Tuzman   said that while the company will continue to evaluate small acquisitions that add geographical and sales vertical reach in areas where we could be relatively stronger, it is also considering “more transformative acquisition opportunities, where we might be able to acquire a top competitor and significantly extend our market share in one action.”

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You can read the full Kit digital announcement here.

Here is the full Kit digital offering prospectus, which provides useful company and market information.

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Kit digital Reports Q3 Results, Discusses M&A Plans. Says it Expects to Announce a Material Acquisition by Q1 2011.

broadcast industry trends, Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results | Posted by Joe Zaller
Nov 22 2010

IPTV asset management provider Kit digital released its third quarter 2010 results today.  It also provided lengthy commentary about the company’s business activity and M&A plans, following on from the recent disclosure that it intends to spend up to $81.75m on M&A. 

The company announced that it revenue in the third quarter of 2010 was $27.7m, an increase of 20% from in the previous quarter, and an increase of 151% versus the same period a year ago.  On a geographic basis, EMEA contributed 44% of total revenue, with the Asia-Pacific and Americas regions contributing 36% and 20% respectively.

EBITDA for the quarter was $4.4m, up slightly versus the previous quarter, and up 376% versus the same period a year ago.  On a GAAP basis, the company posted a net loss of $8m, which includes $5.1 million in non-cash charges, $4.5 million of integration expenses, and $1.3m in M&A expenses.  The company posted a GAAP loss of $342,000 last quarter and a GAAP loss of $11.1m in the in the third quarter of 2009.

For the first nine months of the year, the company posted a GAAP loss of $26.8m on revenue of $68.2m, and EBITDA of $11.6m.

For fiscal 2010, the company expects to report revenue exceeding $100m and operating EBITDA of approximately $18 million, up 109% and 267% respectively over the previous year.

“As we prepare for 2011, we see the BRIC markets continuing to be a strong growth driver for KIT digital,” said company president Gavin Campion.  “We are already very strong in areas like India, Southeast Asia, Russia and Eastern Europe. So further expansion into Brazil, Greater China and other parts of East Asia are our primary strategic objectives for 2011, as is expansion into certain areas of Europe where we are relatively weak.”

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Recent M&A Activity and Future M&A Outlook

The company also provided detail about its recent M&A activity, saying it has now integrated the operations of recently acquired MAM provider Brickbox Digital Media, video measurement vendor Accela Communications and systems integrator Megahertz Broadcast Systems, which has enabled it to cross-sell and up-sell their respective client bases. 

It also disclosed that it has reached a deal to divest some of its professional services activities for more than $12m, in a deal that is expected to close on November 30, 2010, and includes a spin-off a reseller license for the Kit digital’s VX software platform.

Commenting on plans for future M&A, Kit digital chairman & CEO Kaleil Isaza Tuzman said that the company’s aim is to extend its “current estimated 20%-plus global market share to more than 50% within the next 12 to 24 months… through a vanguard of organic growth complemented by highly selective, accretive acquisitions.

“However, we have also recently been considering more transformative acquisition opportunities, where we might be able to acquire a top competitor and significantly extend our market share in one action. It is for this purpose we announced last week that we priced an equity capital raise of $96 million.

“Having raised funds to support our larger acquisition strategy, we are currently working on a key M&A mandate, and expect to announce a material acquisition by Q1 2011.”

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You can read the full Kit digital Q3 earnings announcement here.

Information about Kit digital’s Q2 2010 results are here.

The prospectus for the company’s new share offering is here.

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KIT digital to Sell up to $110m in Common Stock – Will We See More Long-Hinted M&A?

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Nov 19 2010

IPTV asset management provider Kit digital announced that it plans to sell shares of its common stock a public offering underwritten by Roth Capital Partners, Merriman Capital, ThinkEquity, Janney Montgomery Scott, and Northland Capital Markets.

According to a filing with the SEC, the company says it will sell 8 million shares of common stock at $12 per share, and that it has allocated an additional 1.2 million shares as an over-allotment option.  If all shares are sold, the company will collect $110.4m before expenses.   According to a separate 8K filing with the SEC, the Company expects to receive approximately $88,300,000 in net proceeds from the offering after underwriting fees and offering expenses, or approximately $101,800,000 if the underwriters’ over-allotment option is exercised in full.

This announcement comes on the heels of Kit digital filing an S-3 Shelf Registration with the SEC, under which it may sell shares of its common stock in one or more offerings up to a total dollar amount of $250m over an indeterminate period.

Although these filings did not say what the company will do with the proceeds of the recently announced offering, it has made several recent public statements that provide clues.  These include hints about M&A on multiple occasions, and the fact that it plans to achieve “long-term dominance in our industry segment.”  

When the company recently issued preliminary results for the third quarter of 2010, Kit digital chairman and CEO Kaleil Isaza Tuzman hinted at impending acquisitions, including the potential purchase of a major competitor.  ”Consistent with our previously stated strategic mandate, we continue to look at relatively small acquisitions that add geographical and sales vertical reach, which we intend to fund out of our treasury, cash from operations or limited assumption of debt. At the same time, we are considering more ‘transformative’ opportunities, where we might be able to acquire a top competitor and significantly extend our market share.”

The company also disclosed recently that it has tripled the number of shares of common stock reserved for issuance under its incentive stock plan, saying that it views stock options as an important management tool and a key means to motivate employees to continue to perform.

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You can read the Kit digital prospectus here.

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