NEW YORK (AP) — KIT Digital Inc., which provides video-processing software and services, said Friday that it had bought the assets of Sezmi Corp., a startup that tried to create an alternative to cable and satellite TV service for U.S. households.
Sezmi started selling set-top boxes in 2010 that combined over-the-air TV, Internet video and the ability to tune into paid programming broadcast alongside over-the-air signals. These parallel channels only went live in the Los Angeles area before Sezmi shut down the consumer portion of its service last fall. It didn't release subscriber figures, but there was no sign Sezmi got a major uptake.
Sezmi raised more than $40 million in funding, according to regulatory filings.
KIT Digital, which has executive headquarters in New York and operational headquarters in Prague, said it had paid $16 million in cash and assumed liabilities, and issued about $11 million in stock to Sezmi's owners. It did not specify how much in debt was assumed. It may pay a further $20 million to $25 million over three years if certain targets are met.
Sezmi still provides services to other businesses, like phone companies that want to sell video to cellular subscribers. KIT Digital expects those to add $20 million in revenue and $4 million, or 8 cents per share, in its earnings in 2012.
U.S.-listed KIT Digital shares rose 50 cents, or 5.9 percent, to $8.92 in morning trading Friday.