Earlier this month it was announced that Kit-Digital, who’s been on a recent buying spree gobbling up competitive businesses Narrowstep and The Feedroom, had acquired Multicast Media, one of the earliest media companies to establish themselves as an Online Video Platform, for roughly $18 million. Multicast was founded in 2000 and launched their first OVP product in 2007 with VidegoPro which eventually took on the corporate brand, Multicast. By 2010 Multicast was generating $12 million in revenue from platform licensing which is more than probably 80% of the other OVPs, but had been in talks with Kit-Digital for the past 6 months to merge their services. The deal comprised of $4.9 million in cash, 1.3 million shares, and a debt assumption of $4.6 million.
I asked the Multicast team for a quick Q&A to dig into the acquisition to learn a little more about what the new organization will look like, what will happen with Multicast’s brand, and what will be the layout of the corporate structure.
VidCompare: How long have you been working on this deal with Kit Digital?
Multicast: The deal had been in the works for roughly 6 months.
VidCompare: The release mentions that your team will remain in tact in GA. Do you expect to integrate the services into one business unit eventually?
Multicast: Our Atlanta office will remain in tact and will serve as the headquarters of KIT digital’s technical operations in the Americas region.
VidCompare: If not, will the Multicast name remain in play as a separate offering?
Multicast: For now, the two brands will remain the same – Multicast and KIT digital. Over the next few months, Multicast will become KIT digital. However, our Streaming Faith and 316 Networks brands will remain the same. Multicast and KIT’s technology platforms will be fully maintained in the foreseeable future. Over time, we will integrate the two platforms together to create the “best of breed” platform that brings the most benefit and value to our clients. There will be no lost functionality.
VidCompare: What will be your new roll within the company?
Multicast: Lou is now the head of the Americas. Multicast is very excited about joining the KIT digital family and the opportunity to bring even more value and exceptional customer service to our clients.
The Kit-Multicast merger is a sign of the times in my humble opinion. As I’ve mentioned in the past, I think 2010 is the year of streamlined OVP business models and the beginning of the shakeout in the space.
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