KIT digital, Inc., a global provider of video asset management solutions (VAMs) for multi-screen IP-based delivery, has acquired Accela (News - Alert) Communications, Inc., a marketing technology company based in Southborough, Massachusetts, and the assets of Megahertz Broadcast Systems, Ltd., an independent broadcasting systems integrators based in Ely, United Kingdom.

Kaleil Isaza Tuzman, the chairman and CEO of KIT digital, said that these acquisitions extend KIT digital’s market share position for enterprise-level video asset management products and services throughout the multiple screens of the mobile and tablet device, browser and IP-enabled television. These acquisitions are consistent with the company’s acquisition strategy of geographical and sales vertical expansion. They are expected by the company to be accretive on both a revenue and cash-flow basis.

For the acquisition of Accela Communications, KIT digital paid consideration of around $4.7 million (net of working capital adjustment), including $1.8 million in cash and 332,763 shares of KIT digital common stock. Stock consideration is subject to lock-up provisions, and will help guarantee management's long-term commitment and upside in the combined digital business. Accela derives in excess of $3.7 million in annualized recurring licensing fees from its interactive video and multimedia software solutions basing on its most recent August results.

Accela’s 30+ employees will stay in Southborough, Massachusetts. The location will also become the New England sales and account management hub of KIT digital.

Accela Communications’ acquisition was closed on Sept. 8, 2010.

Under the terms of Megahertz Broadcast Systems’s acquisition, KIT digital will acquire 100% of Megahertz's assets from its Canadian parent company, AZCAR Technologies, Inc., in exchange for $2.7 million in net cash and certain stock-based management incentive agreements. Megahertz derives in excess of $4.5 million in annualized revenues from its long-term client services relationships and maintenance contracts basing on its most up-to-date August results.

Megahertz's 20+ employees and full-time consultants will stay in Ely, UK. The location will become an integral part of KIT digital's existing EMEA sales and account management activities.