KIT digital Inc. (KITD) issued an update on its 2011 performance, completed the asset purchase of Sezmi Corp., increased its 2012 forecast, and implemented plans to move its secondary listing from the Prague Stock Exchange to the London Stock Exchange, in addition to its current NASDAQ Global Select listing.
The company expects to deliver on its earlier provided 2011 fourth-quarter guidance, including positive free cash flow in December of at least $2.5 million. KIT digital intends to report preliminary fourth quarter 2011 financial results in February.
On December 30, 2011, KIT digital purchased certain assets and liabilities of Sezmi Corp., a provider of broadband-broadcast hybrid TV solutions. KIT digital paid consideration of nearly $27 million in a mixture of stock and cash, plus earn-outs. The transaction is anticipated to be immediately accretive on a revenue, cash flow, and cash earnings basis.
Also, the company added that the closure of the acquisition at year-end allowed for certain tax and accounting consolidation advantages without impacting fourth-quarter 2011 operating results. Upon the completion of the acquisition, KIT digital expects to have about 47.5 million shares outstanding.
For 2012, KIT digital is now expecting revenues of at least $320 million compared to $300 million previously and adjusted, or cash EPS of at least $1.53 versus $1.45 earlier. The increase in adjusted earnings per share view reflects the accretive Sezmi acquisition, and is inclusive of anticipated restructuring and integration costs.
Additionally, the company plans to move its secondary listing from the Prague Stock Exchange to the London Stock Exchange in order to improve liquidity and investor accessibility in Europe, while KIT digital would continue to be an onshore filer in the United States and the NASDAQ Global Market would continue to be its primary stock market listing. LSE shares would be fully fungible with NASDAQ-listed shares. The company anticipates that it would be able to effectuate the move by the end of 2012 second quarter.
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