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Brickbox, IDM acquired by global player KIT digital Inc

Czech authoring and post-production facility Brickbox Digital Media and International Digital Management (IDM) – in which Brickbox had previously purchased a significant stake – have been acquired by KIT digital Inc, a leading global provider of video asset management solutions for multi-screen IP-based delivery.

Relocated in Prague last year, KIT digital is mainly owned by US financial institutions, with serial entrepreneur Kaleil Isaza Tuzman as its Chairman and CEO, and largest shareholder.

KIT digital developed KIT VX-one, a family of end-to-end software platform solutions that enable enterprise clients to acquire, manage and distribute video assets across three screens – the personal computer, mobile device, and IPTV-enabled television set. The company's client base includes more than 1,000 customers across 40 countries.

"This was a choice acquisition for us which we had our eyes on for some time, extending our capabilities and commercial reach in premium content management and services for the major and 'mini-major' Hollywood studios," said Tuzman. "For the last two decades, the Czech Republic has become a global knowledge center for audio-visual engineering, with a history of production, post-production, graphics and special effects work with major studios. The acquisition of Brickbox Digital Media […] underlines our commitment to building a global leader from the heart of Central Europe."

For Petr Stransky, Brickbox CEO, KIT digital was the right strategic move “particularly given KIT digital's experience serving network operators and broadcasters who have a pressing need to offer premium film content to their respective client bases.”

Brickbox has approximately 85 employees in its main Prague and Sofia offices, with additional business development and account management staff in the US, UK, Bulgaria, Hungary, Poland, Romania and Slovakia. The company acquired leading Hungarian authoring service provider Media Vision Kft earlier this year.

International Digital Management, based in Los Angeles and Sofia, Bulgaria, with sales offices in London, has a 10-year history supplying digital services to the Hollywood majors. It complements Brickbox’s position as a leading provider of services to the independent film, music and publishing sector. IDM’s LA office opened in 2009 to bridge production aspects such as encoding and project management that should be undertaken in US with the onward cost-efficiency savings of its East European facility.

IDM will continue to trade within its existing structure with staffing and client servicing set to continue as is. “Of course IDM’s service levels will now extend more formidably into digital asset management and we look forward to advertising these services in due course. Under KIT digital’s umbrella, IDM has become a much stronger global business partner,” says Head of company Jonathan Finnerty.

Based on recently closed August results, Brickbox and its affiliates generated approximately $12 million in annualised revenues, with an estimated $1 million in standalone profit over the trailing twelve months.

KIT digital says it paid $10.1 million (after working capital adjustment and $1 million hold-back related to consolidation of Brickbox's minority interests). KIT digital also agreed to pay the shareholders of Brickbox 10% of forward revenues from Brickbox over a four-year period, “subject to a $20 million annual revenue threshold for each year and certain profitability thresholds.”

The company expects there will be “modest restructuring and integration expenses related to the acquisition.”

Story filed 26.09.10

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