SOURCE: KIT digital, Inc.

KIT digital, Inc.

December 29, 2010 08:30 ET

KIT digital to Launch KIT China

Leading IP Video Management Solutions Provider to Strengthen Presence in Greater China with 30-Person Initial Team and US$3 Million Investment

PRAGUE, CZECH REPUBLIC and BEIJING--(Marketwire - December 29, 2010) - KIT digital, Inc. (NASDAQ: KITD), a leading global provider of cloud-based video management solutions for multi-screen delivery, has signed a letter of intent to establish KIT China in partnership with Morse Chen, founder and former CEO of Greater China's first premium content IP video portal, Webs-TV (now called Yam.com). KIT digital plans to officially launch KIT China in the beginning of the first quarter of 2011.

KIT China is expected to become the vehicle through which KIT digital will manage its business in the Greater China area (China, Taiwan, Hong Kong and Macau), including service of existing clients in the region, deployment of new clients, customer-driven customization of its industry-leading VX-one software solutions, and the establishment of local channel and re-selling partnerships. Over time, KIT China would also serve as a remote development and delivery center for the company's Prague-based research and development team.

Chen would serve as president and chief executive officer of KIT China, bringing with him 19 years of successful entrepreneurship and business creation, and more than a decade of IP video experience. Chen founded Webs-TV in 1999, building it to nearly US$50 million in annual revenue before exiting the business in 2007.

KIT China is expected to be staffed initially by a 30-person local team centered in Taipei and Chengdu, with KIT digital's pre-existing sales offices in Beijing and Taipei becoming part of the KIT China operations.

KIT China is being established to enhance KIT digital's already strong presence in Asia (and its leadership position in Southeast Asia, the Indian subcontinent and Australasia), where its clients include Astro, CNBC, Express News, ESPN Star, ETV, MediaCorp, Google, NDTV, Reliance MediaWorks, Saab, Sahara, Sanitarium, Sensis, Singapore Telecom, Spirit of Tasmania, Suzuki, Tabcorp, Telstra, TV9, VTV and ZeeTV.

"The formation of KIT China demonstrates our commitment to the world's highest growth market and our determination to be the global leader in next generation video management solutions," said Kaleil Isaza Tuzman, chairman and CEO of KIT digital. "At KIT digital, we understand that you have to be on the ground and close to clients to succeed in international expansion. Particularly in Asia, you need to be truly local and appreciate the differences between sub-regions."

"I have been an admirer of Morse's creativity and track record in the IP video arena for many years," continued Isaza Tuzman. "He has been a true pioneer of online video distribution of premium content in Greater China, bringing his company through the life cycle of start-up phase, profitable growth and eventual sale. In our past dealings together he has proven to be a businessman of great integrity and professionalism. I am confident Morse will bring the energy, experience and maturity of leadership we need to succeed in Greater China. As with all of our global sales efforts, KIT China will be held to strict gross contribution and profitability targets, reflecting our commitment to aggressive regional growth combined with financial discipline."

Chen commented: "My team and I are excited to be joining the global leader in IP video management solutions, and we believe our collective strength will yield exceptional value for both existing and future KIT clients. Given our longstanding relationships with content owners and network operators across the region, we think the sales synergies are obvious. We also see KIT China as a great platform for other strategic partnerships in China, given the onshore legal and operating structure."

Content owners and network operators throughout Asia have been adopting KIT's VX-one platform, helping to accelerate KIT's growth and momentum in the region. According to Cisco's June 2010 Visual Networking Index, IP traffic in Asia Pacific is expected to grow at a compound annual growth rate of 35% for the foreseeable future. "We expect KIT China to substantially enhance our ability to meet this growing customer demand," said Ashish Mukherjee, KIT digital's head of Asia, "and should help us secure several high-profile customer engagements and strategic partnerships in our pipeline."

KIT VX-one, the company's family of end-to-end software platform solutions, enables enterprise clients to acquire, manage and distribute video assets across the three screens of today's world: the personal computer, mobile device, and IPTV-enabled television set. The application of VX ranges from commercial video distribution to internal corporate deployments, including corporate communications, human resources, training, security and surveillance. KIT's global professional services teams implements and integrates next-generation video management systems in the context of traditional broadcast infrastructure, including automated play-out systems, studio fit-out and outdoor broadcasting solutions.

Under the letter of intent's proposed terms, KIT digital plans to invest US$3.0 million in the formation and launch of KIT China. The terms of the agreement call for KIT digital to retain the vast majority shareholding in KIT China while assuming a minority ownership stake in Xun-Jia Technology, a Chengdu-based digital media development company controlled by Chen. The associated transactions are expected to close by January 31, 2011.

About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading global provider of video management solutions for multi-screen delivery. KIT digital's global client base includes approximately 1,300 customers across 40+ countries, including The Associated Press, BBC, Best Buy, Bristol-Myers Squibb, Disney-ABC, FedEx, General Motors, Google, Hewlett-Packard, Home Depot, IMG Worldwide, ESPN Star, MediaCorp, News Corp, Telefonica, Universal Studios, Verizon and Vodafone. KIT digital is headquartered in Prague, and maintains principal offices in Atlanta, Beijing, Boston, Buenos Aires, Cairo, Cambridge (UK), Chennai, Cologne, Delhi, Dubai, Kolkata, London, Los Angeles, Melbourne (Australia), Mumbai, New York, Singapore, Sofia, Stockholm, Taipei and Toronto. For additional information, visit www.kitd.com or follow the company on Twitter at www.twitter.com/KITdigital.

KIT digital Forward-Looking Statement
This press release contains certain "forward-looking statements" related to the businesses of KIT digital, Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects," "plans" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including but not limited to uncertainties relating to product development and commercialization, regulatory actions or delays, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our public filings with the U.S. Securities and Exchange Commission. KIT digital is not under obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. 

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