Digital Media Firm Hyro To Sell Operations to Czech firm KIT Digital for A$17m

24th April 2012. Hyro Limited (HYO) has announced it has entered into a Security Purchase Agreement with KIT digital Inc for the Company to sell its Main Undertaking and Operations to KIT digital for the purchase price of AUD$17.2m in cash, or 2,079,972 NASDAQ listed ordinary shares in KIT digital (at the discretion of KIT digital), equivalent to 60 cents a share.

Under the Agreement, the Company will sell to KIT digital the Company’s shareholding in the following wholly owned subsidiaries of the Company: Hyro Australia Pty Ltd; Idaptive Pty Ltd; Hyro Digital Pty Ltd; Hyro Asia Limited, a company registered in Thailand. 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.

KIT Digital, a NASDAQ listed company (NASDAQ: KITD) with its operational headquarters in Prague in the Czech Republic has with a market capitalisation in excess of US$300 million as at 22 April 2012. Having grown through acquisition, KIT digital services almost 2,500 clients including some of the world’s biggest brands, and has over 20 offices globally. The agreement with KIT digital comes at a time when Kit digital is facing change. Earlier this month the CEO resigned, four board members stepped down, the company’s financials are under scrutiny, and there is an SEC investigation.

KIT Digital submitted a 60 cents a share indicative offer in December 2011, at a time when Hyro shares were trading at around 28 cents; a far cry from its worth pre-global financial crisis, when shares in Hyro traded at prices as high as $30 per share. At the time, Hyro had expanded into IT services with the acquisition of Synergy Plus. It since sold Synergy Plus to ASX-listed ComputerCorp, which rebranded Synergy Plus, before going into receivership in 2011.

KIT Digital has advised that the revenue acquired in the acquisition of Hyro based on the 2011 year will be approximately US$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 US$14.5 million based on the April 20, 2012 closing price.

Press reports indicate KIT Digital’s primary interest is Hyro’s Idaptive identity management software. Hyro’s Idaptive business was formally separated from the company in September last year as the board considered selling off the asset. The announced deal would see it and three other Hyro subsidiaries absorbed into Kit Digital.

“This acquisition was agreed to and referenced in communications prior to the management transition that took place in March,” said KIT Digital 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.”

“Both Hyro and KIT digital’s service offering in Australia and the Asia Pacific region are strongly complementary, particularly in areas such as video technology, strategy development and user experience. KIT digital brings significant experience in video and IP-solutions which will be of great benefit to existing Hyro clients. In addition, Hyro will continue to fully support our customer’s solutions throughout the region” said Hyro Chairman, Mr Rob Clarke. Dr Anthony Poiner, Hyro Chief Executive Officer said “This is an exciting development for all Hyro staff and clients. We will now be able to contribute our talent and experience to KIT digital’s global business and bring their video technology experience and expertise to our customers across Asia- Pacific.”

About KIT digital
KIT digital (NASDAQ: KITD) is a leading video technology and services company. The KIT Video Platform, the company’s cloud-based video asset management system, enables enterprise, media & entertainment and network operator clients to produce, manage and deliver multiscreen socially-enabled video experiences to audiences wherever they are. KIT digital services nearly 2,500 clients in 50+ countries including some of the world’s biggest brands, such as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, Mediaset, MTV, News Corp, RCS MediaGroup, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica O2, Universal Studios, Verizon, Vodafone and Volkswagen. KIT digital maintains executive offices in New York and its operational headquarters in Prague, Czech Republic, with offices in 21 countries around the world. Visit the company at www.kitd.com or follow on Twitter at www.twitter.com/KITdigital.

About Hyro
Hyro is a leading Australian technology company that delivers enterprise level online and mobile solutions to the telecommunications, broadcast, retail, finance and government sectors. The company provides strategy, development, systems integration and managed services across a range of digital content technologies and solutions including significant experience in content, video and live streaming across multiple devices. Hyro has offices in Melbourne, Sydney, Brisbane and Bangkok. Hyro currently counts 180 staff across five offices. It will form the largest of Kit Digital’s entities locally, including the recently-acquired cloud video provider ioko.

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