PRAGUE, CZECH REPUBLIC & MELBOURNE, AUSTRALIA: KIT digital Inc., a leading video technology and services company, has signed a definitive agreement to acquire Hyro Ltd, a digital solutions company that provides enterprise grade technology, systems integration, software and managed services solutions, headquartered in Melbourne, Australia. The company previously signaled this acquisition in investor and analyst conference calls.
Revenue acquired in the acquisition of Hyro based on the 2011 year will be approximately $20 million. The company will have at least $2 million in cash on the balance sheet at closing and the transaction is expected to be immediately accretive on an earnings and cash flow basis. KIT digital will elect to pay consideration in KIT digital common stock of approximately 2.1 million shares, totaling approximately $14.5 million based on the April 20, 2012 closing price.
KIT digital expects to leverage Hyro resources in support of current and future deployments across Asia-Pacific, whereby skilled resources are required to fulfill both existing contracts and future growth, based on the sales pipelines of both companies. Currently, Hyro employs 115 staff in Australia and Thailand supporting tier one operators throughout the region, such as Foxtel and Telstra.
"This acquisition was agreed to and referenced in communications prior to the management transition that took place in March," said CEO Barak Bar-Cohen. "Our objectives over the last few weeks have been to ensure that the acquisition is immediately accretive on a cash-flow basis and that we are positioned to leverage Hyro's software development and deployment capability on major projects in the region. I'm very confident we have achieved these objectives."
The agreement was signed on April 21, 2012 with the closing of the transaction subject to Hyro shareholder approval at the Hyro Annual General Meeting in first week of June 2012.