KIT digital has acquired the assets and assumed certain current liabilities of London-based Narrowstep. The acquisition expands KIT digital's client delivery capabilities particularly in live-streaming, long-form delivery and delivery using the Microsoft Silverlight technology.

Narrowstep's proprietary telvOS Internet TV platform specializes in long-form video-on-demand and live streaming for enterprise customers, using Silverlight and its own content delivery network services. KIT digital management estimates Narrowstep's current, recurring revenues to be approximately $110,000 per month. The acquisition is expected to be immediately accretive and pro forma cash flow positive based on synergies in G&A and variable costs. The transaction includes a transition of Narrowstep's client relationships to KIT digital, including The Outdoor Channel, The Paralympics, BBVA, and the Red Cross. As part of the transaction, KIT digital will also acquire and integrate Narrowstep's reseller relationships which include Can Communicate, a UK-based digital agency specializing in creating brand generated content, and Vivocom, a leading provider of IPTV technology and production services based in Spain.

Under the terms of the agreement, KIT digital acquires 100% of Narrowstep's operating assets and assumes current liabilities in exchange for 25,000 shares of restricted KIT digital common stock. Concurrently with the closing, Granahan McCourt Capital, LLC, a shareholder of Narrowstep, will lend $350,000 to KIT digital in the form of an interest-free convertible note, which will be used to cover technical and operational restructuring charges incurred in the acquisition.

In the context of the transaction, the companies will consolidate staff locations in London and New York.

The transaction has been approved by the board and expects approval from a majority of the shareholders of Narrowstep.