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KIT digital Acquires Kyte, Signaling Era of Video-Driven Social Media

January 31, 2011 PRAGUE, Czech Republic and NEW YORK, New York – KIT digital, Inc. (NASDAQ: KITD), a leading global provider of cloud-based video asset management solutions (VAMS) for multi-screen delivery, has acquired San Francisco-based Kyte.

KIT digital acquired privately-held Kyte, a leading cloud-based publishing platform that enables companies to deliver live and on-demand video experiences to websites, mobile devices and connected TVs.

Founded in 2006 and based in San Francisco, Kyte’s advanced mobile distribution and social media integration capabilities enable media companies and enterprises to reach, engage and monetize audiences. It reported fiscal 2010 revenues of US$3.7 million, derived primarily from SaaS platform fees.

KIT digital paid consideration of approximately US$5.7 million on a cash-free, debt-free basis, plus certain future management incentive payments. The consideration was comprised of US$3.1 million in cash and the remainder in shares of KIT digital common stock. The transaction is expected to be financially accretive on both a revenue and operating cash-flow basis.

Content creators on the Kyte platform produce live or on-demand video through a variety of online and mobile production tools. Content is delivered through the Kyte player, branded social network applications, applications for Internet connected devices and custom-developed API integrations, while simultaneously reaching a mobile audience through Kyte-powered branded mobile websites and native applications.

Kyte’s multimedia chat, RSS, Twitter and Facebook notification services keep audiences up-to-date with the latest content and channel activity. Sharing/embedding tools and social network applications encourage viral distribution across the Web and promote organic audience growth.

“Kyte is recognized as having the most advanced mobile publishing technology in the marketplace, and has an aggressive and talented management team,” said Isaza Tuzman. “We plan to leverage Kyte’s proprietary platform and application frameworks to serve and expand KIT’s global client base. The acquisition also adds a strong West Coast presence in the U.S., which we will use as a R&D and business development hub.”

Kyte was named 2010 Streaming Media Editors' Pick for its vision and execution in the online video industry, describing it as the “the most innovative, most important, and just plain coolest stuff in online video.”

Kyte brings key additions to KIT digital’s management team as well, including Erik Abair, chief technology officer and co-founder of Kyte, and Gannon Hall, Kyte’s chief operating officer. Abair will join KIT’s product development team as senior director of software development to help innovate and drive the next generation of KIT products, while Hall will become KIT’s executive vice president of global marketing, where he will oversee the company’s outbound marketing, communications and demand generation efforts. Abair will remain based in San Francisco, while Hall will relocate to KIT’s Prague headquarters.

Kyte’s chief operating officer, Gannon Hall, commented: “KIT digital's global presence, strong entrepreneurial spirit and commitment to innovation made this merger clearly superior to other strategic opportunities. KIT’s scale and expertise make it possible for Kyte to realize the full potential of its pioneering innovations in online and mobile video, including new opportunities in the over-the-top (OTT) connected device and enterprise video markets.”

Kyte adds nearly 100 clients, including CBS, Clear Channel, FOX News, MTV, Walt Disney Company, Nokia, Publicis, Swatch, Oprah Winfrey, and ESPN Europe.

Kyte has approximately 50 total staff members and is headquartered in San Francisco with a sales office in London. For additional information on Kyte, go to www.kyte.com.

KIT digital Company Contact:
Adam Davis
Global Communications Manager
Tel. +1-609-468-9500
adam.davis@kitd.com

KIT digital Investor Relations Contact:
Matt Glover or Geoffrey Plank
Liolios Group, Inc.
Tel. +1-949-574-3860
info@liolios.com

KIT digital Media Contact:
Alexis Wilson
Edelman | Corporate & Public Affairs
Tel. +1-212-704-8291

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