KIT digital has executed a definitive agreement to acquire privately-held Multicast Media Technologies of Atlanta, Georgia for net consideration of approximately $18.0 million, comprised of $4.9 million in cash and 1.3 million shares of KIT digital common stock, plus the assumption of approximately $4.6 million in long-term liabilities.

Multicast is a recognized North American market leader in live event broadcasting, Internet video management and targeted multimedia communications. In 2009, nearly 1,000 organizations used Multicast’s hosted solutions to broadcast 50,000 live events and serve more than 250 million video streams to a worldwide audience.

Multicast’s clients include government, non-profit and faith-based organizations, as well as a number of Fortune 500 companies. Multicast derives an estimated $12.0 million in annualized recurring licensing fees for its IP video management software, with certain additional revenues related to professional services.

Multicast adds approximately 960 distinct enterprise and faith-based customers, including FedEx, The Knot, In Touch Ministries, Move, Inc., World Changers Church International, Delta Airlines, Joyce Meyer Ministries, Cummins, Lakewood Church, Home Box Office, The Christian Science Publishing Society, EWTN Global Catholic Network, AutoTrader.com, and AstraZeneca.

Multicast’s online video platform, Media Suite, provides customers with an end-to-end solution for preparing, managing and publishing live and on-demand IP video and multimedia presentations. Media Suite’s core capabilities and optional add-on modules are integrated via a smooth and efficient workflow. Multicast was recently awarded first place for Streaming Media Magazine’s 2009 Readers’ Choice award in the “Transcoding SaaS” category by more than 5,000 voters.

KIT digital will be progressively integrating Media Suite’s live and content delivery solutions onto its VX-one platform, and expects to host Multicast’s clients operating on a unified platform by the third quarter of 2010.

The acquisition includes the appointment of several Multicast executives to KIT digital’s global management team. As a result of the acquisition, KIT digital also expects to integrate Multicast’s successful channel partnerships with leading content delivery infrastructure companies, creative agencies and marketing services companies, all of which support Multicast’s direct sales team. Atlanta, Georgia, will continue to be home to Multicast’s 90+ employees and will become an important hub for KIT digital’s client delivery for both North and South America.

Concurrent with the Multicast acquisition, KIT digital announced that it has acquired or agreed to acquire nearly 4 million of its outstanding in-the-money warrants over the course of the first quarter, using the proceeds from its recent $15.0 million public equity offering.

Pro forma of the issuance of common shares and cash outlay related to the acquisition of Multicast and repurchase of outstanding in-the-money warrants, as well as the payment of assumed liabilities of Multicast, KIT digital estimates it will have approximately 17.7 million as-diluted shares outstanding, and hold approximately $15.0 million in net cash and equivalents. The company expects there will be some restructuring costs following the acquisition of Multicast.

KIT digital plans to close the acquisition of Multicast by March 31, 2010. Janney Montgomery Scott LLC acted as financial advisor to KIT digital on this transaction.