Posts Tagged ‘Peter Heiland’

Bankruptcy Court Approves Kit Digital Restructuring, Company to Rebrand as “Piksel” Before IBC 2013

broadcast industry technology trends, Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Aug 06 2013

After more than a year of rumor, speculation, management changes, and shareholder lawsuits, it appears that the Kit Digital roller coaster ride is finally coming to an end – with a successful outcome for company management.

The one-time high-flying online video delivery provider announced that its Plan of Reorganization under Chapter 11 will be confirmed by the U.S. Bankruptcy Court for the Southern District of New York.

KIT digital filed for voluntary bankruptcy protection in April 2013 “to cleanse itself of legacy issues, including financial, legal and regulatory matters.”

At that time, the company filed a Reorganization Plan with the Court under which it would go into bankruptcy, be recapitalized by a “plan sponsor group” of investors, and emerge as profitable, debt-free business.

According to the Reorganization Plan, the company entered Chapter 11 with the intention of closing at least eight loss-making subsidiaries, while retaining four of its profitable subsidiaries: Ioko 365, Polymedia, KIT digital France and KIT digital Americas.  In its filings with the Court, Kit disclosed that the aggregate revenue generated in 2012 by these four remaining business was approximately $134.5 million.

With the new announcement, it appears the company’s Reorganization Plan has now been approved by the Bankruptcy Court.

Kit says that once it emerges from Chapter 11, it will change its name to “Piksel,” and re-brand in time for the IBC trade show in September 2013.

If the company can overcome the “legacy baggage” of Kit Digital, Piksel may turn out to be a formidable player in the broadcast industry once it is fully up and running later this year.

According to Court documents, Piksel will have more 800 employees and revenues in excess of $100m, making it one of the largest players in the industry broadcast industry, where the majority of its business comes from.  After emerging from Chapter 11, it’s also likely that the company will have little debt.

More importantly, Piksel will operate in an area where broadcasters and media companies are increasingly focusing their attention, the management and delivery of multi-screen video services.  Not only does the new company have core technical expertise in this area, it also boasts a large professional services organization capable of specifying and implementing complex multi-screen deployments, and a 24×7 network monitoring operation, which is offered as a service to clients who do not want to build their own multi-platform NOC.

It remains to be seen how well the company will fare once it comes out of Chapter 11, but Peter Heiland, who became interim CEO of Kit Digital in August 2012, provide a few clues in his upbeat statement about the company’s future. “Piksel is set to emerge as a healthy, dynamic company with a great mix of talented employees, market-leading customers, profitable assets, and sufficient liquidity for operations and investments,” he said.

Heiland went on to say that the new company will “leverage its solutions expertise; the flexibility of which will be driven by a suite of software applications, industry partnerships, and world-class professional and managed services.”  He also acknowledged the people who helped the company through what was presumably a traumatic period, saying “I would like to thank all of those who dedicated so much time and effort, including our employees and advisors, to helping us complete our restructuring.”

KIT digital will officially rebrand as Piksel on August 29, 2013.

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Related Content:

Press Release: KIT digital Restructuring Approved; Prepares to Exit Bankruptcy and Change Name to Piksel

Kit Digital Announces $6 Million Settlement of Securities Lawsuits

KIT Digital Files For Chapter 11 Bankruptcy, Plans to Re-Emerge as “Healthier, Focused Company” by IBC 2013

KIT Digital: Chapter 11 Plan of Reorganization

KIT Digital: Voluntary Petition for Chapter 11 & List of 30 Largest Unsecured Creditors

KIT Digital: Declaration of Fabrice Hamaide in Support of Debtor’s Chapter 11 Petition

KIT Digital Delisted by NASDAQ, Will Not Appeal

Activist Investor Heiland Becomes CEO at KIT Digital

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Kit Digital Announces $6 Million Settlement of Securities Lawsuits

Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Jul 02 2013

One-time high flying online video delivery leader Kit Digital has signed a memorandum of understanding to settle a series of federal securities lawsuits filed against the company and some of its KIT’s current and former officers and directors.

KIT, which was delisted from the Nasdaq stock exchange in December 2012, and filed for Chapter 11 bankruptcy protection in April 2013, said the execution of this agreement is “an important milestone as KIT continues to build momentum for a successful future.”

A total of four lawsuits are subject to this agreement.  They were filed separately in the US District Court for the Southern District of New York on behalf of all persons who purchased or otherwise acquired KIT stock during the period between May 19, 2009 and November 21, 2012.

The court combined these separate actions into a single Class Action lawsuit.

At issue was conduct that was alleged to have occurred between 2008 and 2011, and alleged violations of federal securities law arising from, among other things, alleged accounting issues, material weaknesses in the internal controls and financial reporting at KIT, certain acquisition transactions that KIT consummated during 2008-2011, and other events from that time period.

Under the terms of the deal, KIT’s insurers will pay approximately $6m to settle all claims of the Class, and all parties will execute mutual releases. KIT and the other defendants will have no obligation to fund any part of the settlement, and any fee award to plaintiffs’ counsel will be paid from the settlement.

KIT digital Interim CEO, Peter Heiland said: “The federal securities lawsuits, which concerned conduct under KIT’s prior management, have been a significant distraction to the business, hindering its ability to attract capital and grow according to its real capability. Resolving these lawsuits signifies our continued progress towards putting the company back on its feet and freeing the company to focus solely on delivering the best in cutting-edge video software and services.

Along with the chapter 11 Plan of Reorganization that’s progressing in a way that we’re confident will satisfy creditors — as well as shareholders keen to invest in the reorganized KIT business, Piksel — the signing of this MOU is yet a further indication that I think we’re finally seeing blue sky ahead.”

KIT added that its entry into the MOU is not an admission of any fault, wrongdoing, or liability for the claims and damages asserted in the Consolidated Action.

The settlement embodied in the MOU is subject to execution of all necessary documents, including a formal stipulation of settlement, as well as all necessary court approvals.

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Related Content:

Press Release: Kit Digital Announces Settlement of Securities Lawsuits

KIT Digital Files For Chapter 11 Bankruptcy, Plans to Re-Emerge as “Healthier, Focused Company” by IBC 2013

KIT Digital: Chapter 11 Plan of Reorganization

KIT Digital: Voluntary Petition for Chapter 11 & List of 30 Largest Unsecured Creditors

KIT Digital: Declaration of Fabrice Hamaide in Support of Debtor’s Chapter 11 Petition

KIT Digital Delisted by NASDAQ, Will Not Appeal

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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Former KIT Digital CEO Blasts Company for “Attempt to Scapegoat Previous Management” and “Recent Record of Deficient Management and Poor Business Execution”

Broadcast technology vendor financials, Broadcast Vendor M&A, SEC Filings | Posted by Joe Zaller
Nov 26 2012

In a letter to the Board of Directors of KIT Digital, former chairman & CEO, Kaleil Isaza Tuzman, strongly criticized the company for “effectively blam[ing] prior management for the Company’s delayed filing of third quarter results and the Company’s intent to restate its financial statements for the 2009-2011 period, among other issues.”

Tuzman, who oversaw an aggressive M&A program at KIT Digital stepped down from the position of CEO as part of a management shake-up, which also involved the resignation of four directors from the company’s board.

Tuzman resigned from the position of chairman in April 2012 after clashing with the board over strategic issues.  In his resignation letter to KIT Digital’s board of directors, Tuzman said: “I have separately discussed my concerns with some of you regarding the manner in which the Company has been viewed by the public market over the years. Based in part on my concerns, I have made a wholly personal decision to step back from a formal role with the Company. As you know, I have not always agreed with other members of the Board of Directors (the “Board”) or, specifically, with all of the decisions or processes followed by the Strategic Transaction Committee of the Board with reference to the current strategic sale process. Although I will no longer be a member of the Board, I intend to stay involved as a shareholder of the Company, and I will also have greater flexibility to independently consider other strategic alternatives for the Company. I also think my departure from a formal role with the Company will give the Company greater flexibility to evolve in its next, post-consolidation stage of development independent of my personality and role as a founder.”

Tuzman was replaced as CEO on an interim basis by Barak Bar-Cohen, but Bar-Cohen’s tenure was short-lived. Bar-Cohen resigned from KIT Digital in August 2012 and was replaced as CEO by  activist investor Peter Heiland of JEC Capital Partners.

In his letter to KIT Digital’s board, Tuzman cites a litany of instances where he says the company’s “current management has shown disregard for the underlying business,” and goes on to provide a list of action items that company management must do immediately in order to “right its ship.”

Tuzman also says he is “prepared to lead a bidding group to buy the Company at a reasonable and substantial cash premium to the current traded price of the Company’s common stock.”

 

The full text of Tuzman’s letter follows:

 

Board of Directors
KIT digital, Inc.
26 West 17th Street, 2nd Floor
New York, NY
10011

Attention: Bill Russell, Chairman

Dear KIT digital Board of Directors,

KIT digital, Inc.’s (“KITD” or the “Company”) November 21, 2012 8-K (the “8-K”) effectively blamed prior management for the Company’s delayed filing of third quarter results and the Company’s intent to restate its financial statements for the 2009-2011 period, among other issues.  The Company’s attempt to attribute its current problems to prior management is spurious.

As one of KITD’s largest shareholders and the Company’s former chairman and CEO, I have kept my opinions on the Company’s trajectory confidential since my departure in April 2012, in deference to the efforts being expended by current management and to avoid unnecessary discord.  However, I can no longer silently abide the Company’s attempt to scapegoat previous management or tolerate the recent record of deficient management and poor business execution.  KITD shareholders deserve to be leveled with on what has occurred at the Company to date, and shown a path forward to success and enhancement of share value, as we have set forth below.

First, some clarifications concerning some implications contained in the Company’s recent 8-K.  During my tenure at the Company, all revenue recognition decisions were made in consultation with and approved by the Company’s independent accounting firm, and approved by your audit committee. We have no reason to believe any of those decisions were improper.  Since my departure, it is possible that your new audit committee members have elected, in consultation with the firm’s outside auditors, to apply different revenue recognition policies. That is not prior management’s responsibility, and a change in revenue recognition policies and application may reflect your recently insinuated decision to further separate the “software” and “services” lines of the Company’s business.  As shareholders, we cannot yet opine on the merit of your decision, since your 8-K lacked details on the matter.

Similarly, the 8K’s vague reference to a lack of disclosure concerning certain undisclosed “related party transactions” is misleading and inappropriate.  During my tenure with KITD, all related party transactions were vetted by KITD’s outside counsel and relevant disclosures in KITD financial statements were reviewed and approved by the Company’s independent accounting firm.  For instance, as you know, my affiliate investment companies, KIT Media and KIT Capital, supported the Company by investing on four different occasions between 2008 and 2011 in public share issuances alongside other public shareholders.  These transactions were “related party transactions” in nature and were disclosed in great detail in press releases and Company financial statements at the time.  The transactions were very positive for the Company (and included two successfully completed financings during the depth of the 2008-2009 financial crisis) and were broadly lauded by KITD’s shareholder base at the time as demonstrating management’s “skin in the game.”  In addition, stock options and restricted stock grants over time to me or KIT Capital for services rendered were also described in detail in the Company’s public filings.  Accordingly, these transactions were all appropriately disclosed and benefited the Company and its shareholders—and, in fact, neither myself nor KIT Capital has ever exercised or sold any of these stock grants or options, nor have I received a single dollar or share in severance.

By comparison, you granted former CEO Barak Bar-Cohen a $250,000 “success bonus” for an extremely dilutive, death-spiral financing concluded after my departure and JEC Capital (the New York hedge fund which currently controls the Company and for which current KITD CEO Peter Heiland serves as Managing Director) recently lent $2.5 million to the Company without a concomitant press release—and the mention of this related party transaction received only cursory mention in an indirectly related SEC filing.

Given the 8-K’s emphasis on the dire current liquidity situation of the Company, it appears to us that you, in conjunction with the Company’s senior creditors, may be conspiring to artificially decrease the Company’s stock price so as to acquire the Company at a fire sale price that is unfair to shareholders.  Indeed, the 8-K’s disclosure regarding covenant breaches of current lender agreements could be interpreted as a lead-in to a pre-arranged, sweetheart deal with the Company’s  lenders.

Previous management presided over a period between December 2007 and March 2012 during which monthly revenues expanded over 20x, operating results went from huge losses to small gains, and the Company’s shares appreciated from $2.90 to over $9.00. Despite your attempt to blame past management for your current results, those close to the Company report that current management has shown disregard for the underlying business—including key clients, employees and vendors. Most startlingly, you seem to have presided over the Company burning more cash from operations in the seven months since I left than the Company had burned from operations in the prior two fiscal years.

Adding to KITD’s problems, the Company’s current management has:

  • failed to visit many, if not most key clients
  • failed to visit more than a handful of Company field locations
  • lost many, if not most, of the Company’s key salespeople
  • disassembled the Company’s core engineering team
  • demonstrated a lack of sufficient understanding of the Company’s core technology, products and capabilities, and failed to make material progress in product development
  • moved the Company headquarters from its low-cost European center of Prague to a high-cost NYC office—despite over 50% of the Company’s revenues being European in origin
  • incurred ballooning operating losses
  • poorly executed on an ill-conceived idea of stripping down and selling individual pieces of the Company—without sufficient comprehension of how software and services units complement each other in serving clients
  • failed to attract significant new talent to the business
  • failed to add material new client contracts
  • failed to communicate a coherent vision for the future to staff, clients and industry observers
  • left an impression with staff, clients, vendors and competitors alike that KITD is under “temporary”, “hedge fund”, “Wall Street-focused” management.

 

Ignoring these poor managerial decisions, the Company instead seeks to scapegoat prior management in describing its current condition.  It is time to redress this situation.

I originally resigned from my post as CEO of KITD in March 2012 (and subsequently resigned from his role as Chairman in April, 2012) because I had come to irreconcilable differences with the Board at the time concerning strategic decisions and the future of the Company.  As a major shareholder, I ultimately felt I could make a greater positive impact on the Company’s development from the outside than from within, especially considering that the Board formed a Special Strategic Committee (the “Special Committee”) in January 2012 which had effectively taken control of all CEO-level decisions.

By way of background, in December 2011, my core management team had recommended to the Board that the Company complete a major restructuring and consolidation of operations (a plan that you finally began to implement about two months ago).  We also recommended to the Board at such time that the Company pursue two competing strategic transactions, each with the potential to be a homerun for shareholders (one a private equity buy-out and the other a merger-of-equals).  Instead, the Board rejected management’s suggested approach and formed the Special Committee with a broad mandate to oversee “any and all strategic decisions” at the Company.  The Special Committee was comprised of two board members—Wayne R. Walker and Santo Politi—and immediately shut down or irreparably delayed the discussions with the strategic transaction counterparties.  KITD’s management-by-special-committee was predictably dysfunctional.  After months of wrestling with the Special Committee to no avail, myself and several members of the core management team eventually resigned.

In connection with my resignation I issued a letter—which was publicly filed by the Company as an 8-K at the time—stating that I intended to independently consider strategic alternatives for the Company.  After my resignation, a bidding group (led by a large private equity firm which I had introduced to the Company), endeavored to obtain approval from the Special Committee to share information with me so that I could participate in connection with a potential offer for KITD.  Unfortunately, the Special Committee refused this request, to the detriment of all shareholders.

Since that time, KIT Capital and other prospective bidders have been repeatedly delayed or stonewalled in our continued efforts to create shareholder value, while the indecision and delay of new management and board continues to result in value destruction.  For example, although KITD’s current management and board finally adopted the staff reduction and office consolidation plan prior management first put forward almost a year ago, the delay has caused KITD to effectively run out of money and may put the Company into the pockets of its lenders.

KITD must right its ship. From an operational perspective, KITD management must immediately:

  • Articulate a vision of the “new” KIT digital, with the focus being on clients, employees and vendors—and away from capital markets
  • Halve executive management costs
  • Tour the top 30 clients globally to ensure contract compliance and renewal
  • Implement a program to re-invigorate the core team of top 50-performing employees globally
  • Complete our original cost reduction and office consolidation plan—including keeping headquarters in Prague, consolidating engineering team into two locations, consolidating New York and Atlanta office into one location and shutting down six other locations globally (including Dubai), while expanding sales and business development staff by one-third
  • Cease the “divide-and-sell” approach to assets
  • Clearly articulate a balance sheet-fortification strategy, centered on a significant private equity minority investment and concomitant restructuring of existing debt, while conducting an open and transparent auction of the Company (engaging both private equity and strategic buyer prospects), with a publicly announced minimum price of $3.75 per share.

 

We do not believe that current management is capable of the actions listed in this letter.  As a result, we are prepared to lead a bidding group to buy the Company at a reasonable and substantial cash premium to the current traded price of the Company’s common stock.  Since May 2012, we have repeatedly requested that the board engage with us and certain other private equity firms regarding a strategic transaction for the Company.  In light of KITD’s mismanagement and the Company’s current circumstances, the Board can no longer afford to ignore these overtures.

Based on our analysis of publicly available information, and subject to due diligence and the execution of a mutually acceptable definitive agreement, we are prepared to lead a bidding group to buy the Company at $3.75 per share in cash, which represents an 81% premium to the closing price of KITD common stock on Wednesday, November 21, 2012 (and an approximately 750% premium to the reported after-market trading price of KITD common stock on that date).  We have reviewed this transaction with two large private equity groups who are interested in participating with us, and believe we have the backing of the Company’s prior and current executives, salespeople and senior engineers who would be key to execute on our plan to right the KITD ship.   We believe we can finalize financing and business terms with respect to this acquisition very quickly if the Board responds forthwith.

For the benefit of all the shareholders, we ask that you to cease and desist from defamatory and inaccurate descriptions of KITD’s prior management and immediately engage in an open dialogue with us on this offer.

Regards,

Kaleil Isaza Tuzman

On behalf of:
KIT Capital, LLC

 

 

Related Content:

Press Release: Former Chairman and CEO Kaleil Isaza Tuzman Sends Letter to KIT digital Board of Directors

KIT Digital to Restate Historical Financial Statements Due to “Errors and Irregularities”

Reuters: TIMELINE-Management woes roil Kit Digital    http://dcft.co/10BEkdZ

KIT Digital To Cut 300 Jobs in Effort to Right Size Operations

Former KIT Digital CEO Bar-Cohen Resigns After Activist Investor Takes Control

KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

KIT Digital Exploring Strategic Options for Company Sale, Fails to Reach Agreement with JEC Capital

KIT Digital Chairman Resigns, Cites Differences With Board of Directors Over Strategic Sales Process

Streaming Media.Com Article: What’s Going on with KIT Digital?

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

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KIT Digital To Cut 300 Jobs in Effort to Right Size Operations

Broadcast technology vendor financials | Posted by Joe Zaller
Sep 18 2012

KIT Digital has implemented a “significant workforce reduction,” which will result in job losses for approximately 300 employees, or 22% of its current headcount, by the time it is completed.

KIT says these actions will save it approximately $40m on an annualized basis, enabling it to “right size its operation and streamline general corporate functions” while maintaining a high standard of customer service.

The majority of the expense reductions will arise from “non-core areas and general and administrative redundancies.”

This announcement is one of the first public moves by KIT Digital activist investor turned interim CEO Peter Heliand, who took control of the company at the beginning of September, leading to the departure of former CEO Barak Bar-Cohen. Heiland, who was also an activist shareholder in Miranda Technology prior to its sale to Belden, owns approximately 8% of the outstanding shares of KIT digital, primarily through JEC Capital Partners, where he is Managing Director.

“By accelerating the integration of the company, we will be able to enhance our product offerings, improve time-to-market efficiency, and bring the business to a place of financial strength,” said Heiland. “While we have completed some non-core divestures and reduced the non essential support infrastructure, we are preserving all of the strategic initiatives surrounding our core competencies as we believe they will drive significant growth.”

The company said the restructuring plan will take place primarily during the third quarter of 2012 and will be completed by the end of calendar year 2012. The company currently estimates that it will record a restructuring expense in the third quarter of 2012 of approximately $4m consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.

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Related Content:

Press Release: KIT digital Restructuring Aligns Expenses With Operations

Former KIT Digital CEO Bar-Cohen Resigns After Activist Investor Takes Control

KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

KIT Digital Exploring Strategic Options for Company Sale, Fails to Reach Agreement with JEC Capital

KIT Digital Chairman Resigns, Cites Differences With Board of Directors Over Strategic Sales Process

Streaming Media.Com Article: What’s Going on with KIT Digital?

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

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Former KIT Digital CEO Bar-Cohen Resigns After Activist Investor Takes Control

SEC Filings | Posted by Joe Zaller
Sep 07 2012

KIT Digital said in an SEC filing that former interim CEO Barak Bar-Cohen left the company on August 29, 2012.

KIT said that after it appointed activist investor, Peter Heiland of JEC Capital Partners, as interim CEO, the company discussed with Bar-Cohen possible continuing roles in the company but were unable to come to a mutually acceptable agreement.

Following the failure to come to an agreement, Bar-Cohen sent a letter notifying the company of the termination of his employment with the Company, as of August 29, 2012.

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Related Content:

Kit Digital SEC Filing: Bar-Cohen Departs KIT Digital

KIT Digital SEC Filing: Heiland Takes Over CEO Role from Barak Bar-Cohen

KIT Digital Posts $102.6 Million GAAP Loss in Q2 2012, Sells Sezmi and Content Solutions Businesses at Steep Loss

Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

KIT Digital Exploring Strategic Options for Company Sale, Fails to Reach Agreement with JEC Capital

KIT Digital Chairman Resigns, Cites Differences With Board of Directors Over Strategic Sales Process

Streaming Media.Com Article: What’s Going on with KIT Digital?

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

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© Devoncroft Partners. All Rights Reserved.

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Activist Investors Claim Board Seats at KIT Digital, Will Refrain From Adverse Actions Against KIT Digital’s Board

broadcast technology market research, Broadcast technology vendor financials | Posted by Joe Zaller
Aug 07 2012

KIT Digital announced that it entered into a standstill agreement with Seth Hamot,  Managing Member of Roark, Rearden & Hamot, LLC, the General Partner of Costa Brava Partnership III L.P., and K. Peter Heiland, Managing Director of JEC Capital Partners, LLC.

As part of the deal, both Hamot and Heiland will join KIT digital’s Board as new directors. KIT also said that Joseph E. Mullin III has resigned from the company’s board.

Hamot owns approximately 7% of the outstanding shares of KIT digital.  Heiland who was also an activist shareholder in Miranda Technology prior to its sale to Belden, owns approximately 8% of the outstanding shares of KIT digital.

In connection with Hamot and Heiland joining the KIT digital Board, KIT digital, Mr. Hamot, Costa Brava, Mr. Heiland, JEC, and their related parties have entered into a standstill agreement. Under the agreement, the Costa Brava parties and JEC parties will support KIT digital’s Board nominees for the 2012 annual meeting of shareholders and they will refrain from taking “certain adverse actions” against KIT digital’s Board.

According to the agreement, these “adverse actions” include the following:

(i)                nominate or propose any candidates for the Board or seek to change or alter the composition or size or membership of the Board or the removal or replacement of any director or call or seek the call of any meeting of stockholders;

 

(ii)              submit a shareholder proposal under Rule 14a-8 of the Securities Exchange Act of 1934, directly or indirectly, to the Company or seek any referendum or the like by the shareholders of the Company;

 

 (iii)             file a proxy or consent statement in opposition to the Company or otherwise obtain or solicit proxies or consents from any shareholders of the Company or be a participant in or make any solicitation for a matter relating to the Board;

 

(iv)             enter into any contract, arrangement or understanding with any person (other than an Affiliate or Associate, subject to the percentage ownership limitation below, for which K. Peter Heiland (in the event of an Affiliate or Associate of a JEC member), or for which Seth Hamot (in the event of an Affiliate or Associate of a Costa Brava member), has and maintains all voting and investment and other applicable authority or which Affiliate or Associate signs a joinder to this Agreement agreeing to be bound by all the terms and conditions hereof as a JEC member or a Costa Brava member as applicable) with respect to any securities of KIT, including but not limited to any acquisition of any securities (or beneficial ownership thereof), joint venture, loan or option agreement, put or call, guarantee of loans, guarantee of profits or division of losses or profits, it being understood that Costa Brava members’ and JEC members’ aggregate holdings in KIT’s securities shall not exceed 9.9% and 9.9% beneficial ownership under Section 13(d) of the Exchange Act, respectively, of the common stock of the Company;

 

(v)              commence or enter into any tender offer or exchange offer, merger, acquisition or other business combination or extraordinary transaction involving the Company or any of its subsidiaries;

(vi)             form, join or in any way participate in a “group” (as defined under the Exchange Act) with respect to the Company or its securities;

 

(vii)            otherwise act, alone or in concert with others, to seek to influence the management, Board or policies of KIT or take any action to seek the removal of any member of the Board, change the size of the Board, obtain additional representation on the Board, or take any other action related to the management or the Board;

 

(viii)          disclose any intention, plan, proposal or arrangement or other matter inconsistent with its obligations under this Section 8(a) (provided that this clause (viii) shall not prohibit a confidential, non-public disclosure with respect to the matters for which a waiver may be sought under clause (xi) below);

 

(ix)             effect or seek (including, without limitation, entering into any discussions, negotiations, agreements or understandings with any third person), offer or propose (whether publicly or otherwise) to effect, or cause or participate in, or in any way, advise, assist or encourage any other person or entity in connection with any action which it is prohibited from taking under this Section 8(a) or which is inconsistent with its obligations under this Section 8(a) (including via any supporting public statement with respect thereto or any adverse public statement regarding the Company or the Board or any of its members);

 

(x)              knowingly take any action which would, or would reasonably be expected to, force the Company to make a public announcement (or result in the Company making a public announcement) regarding any of the types of the foregoing matters; or

 

(xi)             request, directly or indirectly, any amendment or waiver or modification of, or deviation from, any provision of this Section 8 (including this sentence) or any other provision of this Agreement by the Company or any of its agents or representatives (provided that this clause (xi) shall not prohibit a JEC member or a Costa Brava member from confidentially requesting from the Board of the Company an amendment, waiver or modification, or deviation, from this Section 8 to permit the JEC members or the Costa Brava members (respectively) to engage in a transaction subject to clause (v) above or for them to exceed the ownership limitation set forth in clause (iv) above).

 

KIT digital also said its Board will nominate and support each of Mr. Hamot and Mr. Heiland for the 2012 annual meeting of shareholders. The restrictions and nomination provisions will run at least through KIT digital’s 2012 annual meeting of shareholders and will potentially apply through the 2013 annual meeting. The standstill agreement itself will terminate following the 2013 annual meeting of shareholders and is subject to various other terms and conditions.

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Related Content:

Press Release: KIT digital Adds Shareholder Representation to Board of Directors

Text of Standstill Agreement Between KIT Digital, JEC Capital Partners, and Costa Brava

Activist Shareholder Drama Continues at Miranda Technologies

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Activist Shareholder Names New Proposed Directors for Miranda Technologies

broadcast technology market research | Posted by Joe Zaller
Jan 11 2012

JEC Capital Partners (JEC), which in December 2011 requisitioned a meeting of the shareholders of Miranda to replace four of the seven existing directors of Miranda with four new independent directors, has announced the names of the director nominees it intends to put forward at Miranda’s upcoming annual meeting of shareholders.

Miranda has previously rejected JEC’s request as invalid under the Business Corporations Act (Québec), which says a requisition must be signed by a registered shareholder of the Corporation, and that neither JEC nor JMB is registered in the Corporation’s securities register.

Nevertheless, JEC is pushing ahead with a slate of nominees its says have a wide range of industry, merger and acquisition, and corporate finance experience: Claude Fontaine, Clifford Press, Tim Thorsteinson and K. Peter Heiland. Short biographies of each of these proposed directors can be found below.

 

Biographies of the proposed directors

Claude Fontaine is a corporate director and a retired attorney, having been a partner and then senior partner in a major Canadian law firm for over 40 years where he specialized in corporate and securities law, including financing, mergers and acquisitions, business dispositions and corporate governance. With respect to corporate governance, Mr. Fontaine has often been called upon to review the governance systems of major Canadian corporations and has regularly advised public companies and Crown corporations on various aspects of their governance. Mr. Fontaine became a Certified Director of the Institute of Corporate Directors (ICD) in 2006, and has since acted as an ICD certification examiner and in 2009 was named a Fellow of the ICD. Mr. Fontaine is a member of the Boards of Directors or of the Advisory Committees of a number of Canadian companies, including CEPSA Chimie Montréal, CEPSA Chimie Bécancour, Optimum West Insurance Company and ProSep inc. (TSX:PRP). In the past, Mr. Fontaine has served as a director of Petro-Canada, Canadair Inc., Domtar Inc., and Optimum General Inc.

Tim Thorsteinson is the Chief Executive Officer of Enablence Technologies (TSX:ENA), where he was appointed to the Board of Directors in November 2009 and joined the management team as President and Chief Operating Officer and subsequently CEO in April 2010. Mr. Thorsteinson has successfully transformed several challenging businesses to growing, profitable, high-margin market companies delivering high rates of shareholder return. He recently served as President of the Broadcast Division at Harris Corporation with $650 million in revenue, and also served as a Harris Corporate Officer and was a member of the Harris Executive Committee. Prior to joining Harris Corporation, Mr. Thorsteinson was President and CEO at Leitch Technology where he oversaw the execution of a two-year turnaround plan that rebuilt value and positioned the company for a profitable sale.

Clifford Press is a managing member, partner and cofounder of Oliver Press Partners, an investment firm that invest in companies that are believed to be undervalued and which offer significant opportunity for appreciation through corporate transactions. Mr. Press began his professional career at Morgan Stanley in the firm’s mergers and acquisitions department and left in 1986 to form Hyde Park Holdings, a company which engaged in a number of investment and acquisition activities including the acquisition of High Voltage Engineering Corporation and the Detroit & Canada Tunnel Corporation, and is currently a director of GoldMoney Network, Ltd. and SeaBright Holdings Inc. (NYSE:SBX).

K. Peter Heiland is a Managing Director of JEC Capital Partners, LLC, a technology focused investment fund. Mr. Heiland also currently serves on the board of directors of SAM Technologies GmbH and the GSI Group, Inc. (NASDAQ:GSIG). Prior to founding JEC Capital Partners, Mr. Heiland was the founder, owner, and CEO of Integrated Dynamics Engineering, a technology leader that serves a number of large customers, including Nikon, CANON, ASML, Applied Materials, KLA Tencor, and Hitachi. In January of 2008, IDE was acquired by Aalberts Industries.

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Related Content:

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JEC Press Release: Miranda Technologies Calls Early Shareholders Meeting After Pressure From JEC and Other Concerned Shareholders

Activist Shareholder Remains Convinced That Miranda Technologies is Undervalued

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Activist Shareholders Seek To Replace Four Board Seats at Miranda Technologies

 

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Miranda Rejects Activist Shareholder Request as Invalid

Broadcast technology vendor financials | Posted by Joe Zaller
Dec 30 2011

Miranda Technologies announced that it has determined after consulting with legal counsel that the requisition received from JEC Capital Partners, LLC (“JEC”) and JMB Capital Partners Master Fund, L.P. (“JMB”) to call a special meeting of shareholders to consider removing four of the seven directors of the Corporation and replacing them with nominees proposed by JEC and JMB is invalid.

Miranda says that according to the Business Corporations Act (Québec), a requisition must be signed by a registered shareholder of the Corporation, and that neither JEC nor JMB is registered in the Corporation’s securities register.

Miranda says that if a valid shareholder requisition is received, its board of directors will give such requisition due consideration.

Miranda also announced that its annual meeting of shareholders will be held on April 17, 2012 and the business to be transacted at the meeting will include the annual business of the Corporation, including the presentation of the Corporation’s annual consolidated financial statements for the year ended December 31, 2011 and the election of directors.

Brian Edwards, Chairman of the board of directors of Miranda, said “The board of directors of Miranda has chosen to hold our annual meeting at a significantly earlier date than usual. The board and management look forward to this opportunity to meet with Miranda’s shareholders in order to review the Corporation’s achievements in 2011 and to discuss the Corporation’s performance”.

JEC Managing responded almost immediately through its own press release, saying it was “pleased to report that the board of Miranda has listened to the Concerned Shareholders’ demand for an early shareholders meeting by calling the Company’s annual meeting of shareholders on April 17, 2012, a significantly earlier date than usual. Regrettably, Miranda’s board chose to cloak the announcement with the ridiculous assertion that the Concerned Shareholders’ requisition for an early shareholders meeting was invalid.”

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Related Content:

Miranda Press Release: Miranda Determines Requisition of Special Meeting Invalid, Announces Annual Meeting of Shareholders

JEC Press Release: Miranda Technologies Calls Early Shareholders Meeting After Pressure From JEC and Other Concerned Shareholders

Activist Shareholder Remains Convinced That Miranda Technologies is Undervalued

Miranda Responds to Activist Shareholders

Activist Shareholders Seek To Replace Four Board Seats at Miranda Technologies

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© Devoncroft Partners. All Rights Reserved.

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Activist Shareholder Remains Convinced That Miranda Technologies is Undervalued

broadcast technology market research | Posted by Joe Zaller
Dec 24 2011

JEC Capital Partners (JEC), which along with JMB Capital Partners recently requisitioned a meeting of the shareholders of Miranda to replace four of the existing seven directors of Miranda Technologies with four new independent directors, said today that despite a statement from Miranda, it remains convinced that Miranda is significantly undervalued.

JEC Managing Partner Peter Heiland said in a press release that Miranda’s board has “failed to date to successfully push forward proper initiatives to maximize shareholder value.”

“We are one of Miranda’s largest shareholders and are well-informed, long-term investors,” said Heiland. “We were surprised and disappointed by the inaccurate and misleading characterization of our prior interaction with the Board made by the Chairman of the Company. On December 1 of this year, JEC requested the simple opportunity to exchange directly and informally with the directors on issues of value creation and necessary change at Miranda. We told Miranda that other large shareholders, like JEC, believe the share price will continue to languish well below its potential unless concrete steps to maximize value creation are taken, beginning with changes at the Board. Rather than accept JEC’s invitation for dialogue directly, the Board chose to communicate only through its third-party advisors.

“We provided Miranda’s Board with the names and biographies of three (3) independent director candidates and one (1) shareholder representative director candidate, all of whom are highly qualified and would make exceptional directors for Miranda. We encouraged the Company to either expand the current Board to accommodate at least two new directors or replace at least two existing directors with new, more qualified nominees.

“The Board’s refusal to discuss these issues directly reinforces JEC’s belief that Miranda’s current Board, which holds less than 0.3% of the outstanding shares of the Company, and its Chairman will continue to ignore the genuine interests of the concerned shareholders of Miranda and their desire for meaningful change.

“The current Board’s out of touch view that it has strong support among shareholders is shocking. We shared our opinions on the Company and our strategy for maximizing value with large shareholders prior to requisitioning a shareholder meeting. We believe that we have the support of several of the Company’s largest shareholders. Given the current Board’s stated confidence in shareholder support of its position, we urge Miranda to proceed with a shareholders’ meeting as quickly as possible and by no later than the end of January. Any delay in holding the meeting will signal that the Board knows that it does not have the shareholder support that it professes to have and is entrenching itself.”

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Related Content:

JEC Press Release: JCE Responds to Miranda Technologies

Activist Shareholders Seek To Replace Four Board Seats at Miranda Technologies

Miranda Responds to Activist Shareholders

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