KIT Acquires Narrowstep Assets

DUBAI/LONDON: IPTV technology provider KIT digital has acquired the assets of U.K.-based Internet TV platform Narrowstep.

Narrowstep’s telvOS Internet TV platform specializes in long-form VOD and live streaming for its customers, using Silverlight and its own content delivery network services. KIT says Narrowstep’s current, recurring revenues are approximately $110,000 per month. The acquisition includes a transition of Narrowstep’s client relationships to KIT digital, including The Outdoor Channel, The Paralympics, BBVA and the Red Cross. KIT digital will also acquire and integrate Narrowstep’s reseller relationships, such as Can Communicate, a U.K.-based digital agency specializing in creating brand-generated content, and Vivocom, a Spanish-based provider of IPTV technology and production services.

KIT digital is acquiring all of Narrowstep’s operating assets and current liabilities in exchange for 25,000 shares of restricted KIT digital common stock. Granahan McCourt Capital, a shareholder of Narrowstep, will lend $350,000 to KIT digital in the form of an interest-free convertible note, which will be used to cover technical and operational restructuring charges incurred in the acquisition.

Kaleil Isaza Tuzman, the chairman and CEO of KIT digital, said, "The acquisition and integration of Narrowstep expands our IPTV delivery capabilities in a couple of key areas, while delivering an immediate financial contribution without consuming net cash. This further solidifies our position as the leader in the IP-based video platform marketplace, as measured by revenues, operating cash flow, geographic scope, and product suite capabilities. Narrowstep’s roster of enterprise customers and the expertise and capabilities of the Narrowstep team are a welcome addition to the KIT family."

David C. McCourt, the managing principal of Granahan McCourt Capital, added: "Granahan McCourt is very supportive of this transaction, and we are happy to be providing low-cost transition financing so that KIT digital can continue to support Narrowstep’s customers and employees through the period of integration between the businesses. Both parties thought it important that KIT digital was provided a small cash cushion in the deal, to effectively transition over Narrowstep’s assets, customers and employees."