KIT digital Expands Leadership in Enterprise IP Video Management With Acquisitions of Nunet and The FeedRoom

PRAGUE, CZECH REPUBLIC, Oct 05 (MARKET WIRE) --
KIT digital, Inc. (NASDAQ: KITD), a leading global provider of on-demand
software solutions for managing and monetizing Internet Protocol
(IP)-based video assets, has executed separate definitive agreements to
acquire two of its leading competitors, Nunet AG of Cologne, Germany and
The FeedRoom, Inc., based in New York City.

Nunet was acquired from IMG Worldwide, Inc. and is considered a premier
global provider in the management and delivery of video on mobile devices,
while The FeedRoom is a venture capital-backed, privately-held market
leader in live video and digital asset management for corporations.

"Nunet and The FeedRoom complement and substantially expand our client
base, core capabilities and our commitment to serving video to the 'three
screens' of the mobile device, browser and television through an IP
set-top-box," said KIT digital's chairman and CEO, Kaleil Isaza Tuzman.
"We expect these acquisitions to be immediately accretive to our financial
results and provide substantial synergies in terms of business
development, platform technology, geographical footprint and overall
growth potential."

The acquisition of Nunet adds a number of major international clients to
the KIT digital roster. A wide range of global mobile network operators
use its MobileTV digital asset management system, including Mobilkom,
Proximus, SFR, Vodacom and Vodafone Group. Nunet also works with major
broadcasters and content producers like Discovery Channel, Eurosport
International, Fashion TV, IMG Worldwide and MTV Networks.

The FeedRoom dramatically expands KIT digital's presence in North America
through the addition of more than 80 enterprise customers, including
Barnes & Noble, Best Buy, Bristol-Myers Squibb, BusinessWeek, General
Motors, Herbalife, Hewlett Packard, Honeywell, Intel, Metlife and the U.S.
Department of Defense.

The FeedRoom acquisition enhances KIT digital's VX IP video management
platform through the integration of key features of The FeedRoom's
'Studio' software, including an advanced management, reporting, and
analytics console. In turn, The FeedRoom clients will gain access to the
advanced software features of VX, including delivery of IP video to
mobile devices and IP-enabled TV set-top-boxes, as well as enhanced
geographical targeting and search engine optimization tools.

"We see a great opportunity for cross-marketing Nunet's MobileTV asset
management capabilities as part of an expanded 'VX2' IP video management
offering to our newly combined customer base," notes Gavin Campion,
president of KIT digital. "This customer base includes many brands which
use IP video as part of their external marketing and merchandising
programs, human resources function, corporate communications, and business
operations -- all 'back-end' corporate verticals we view as significant
growth opportunities in the quarters and years ahead."

Initially, the two acquisitions are expected to add $17.5 million of
current, annualized revenues from core IP video-based services, and more
than $4.5 million in annualized EBITDA to KIT digital. Over 75% of the
newly acquired revenues are recurring and subject to long-term contracts.
In January 2009, KIT digital's management said they expected to generate
at least $40 million in revenue with approximately 10% operating margin
for the year. This guidance was reflective of KIT digital's core business
at the time and does not take into account the effect of the acquisitions
of Nunet and The FeedRoom.

The acquisitions also involved the appointment of several Nunet and
FeedRoom executives to KIT digital's senior management team. Nunet has 56
employees, who will remain based in Cologne under the new ownership. Many
of The FeedRoom's 53 employees will join KIT digital's operations in New
York City, while The FeedRoom's offices in Seattle and Boston will be
added to the KIT digital network.

Isaza Tuzman added: "During our recent registered public stock offering
and NASDAQ listing process we made it clear that the net proceeds of the
offering would be used for accretive acquisitions that would expand our
geographical and customer reach, and further establish our leadership
position in IP video management for the enterprise. We fulfilled our
promise by completing these acquisitions quickly and efficiently, and have
already identified operational synergies, a combined leadership team, and
immediate plans for platform technology integration. All of this forms the
basis for strong growth, while delivering an enhanced IP video experience
to our customers and their end-users."

Aggregate Acquisition Terms
(All figures indicated in this release are
in U.S. dollars. An exchange rate of 1.457 EUR/USD was used when
converting from Euros.)

The aggregate consideration paid for Nunet and The FeedRoom was
approximately $20.9 million (based on the closing market price of KIT
digital common stock on Friday, October 2, 2009), of which $9.8 million
was paid in stock, $7.9 million was paid in cash and $3.3 million of debt
was assumed in the form of a convertible promissory note.

In total, KIT digital will issue 1,312,000 shares as a result of the two
transactions, comprised of 948,636 shares issued for 100% of the
outstanding shares of The FeedRoom, and 363,364 shares issued in exchange
for $4.0 million of cash invested in KIT digital common stock by The
FeedRoom's controlling shareholders, at an implied price of $11 per share.
All of the shares issued in connection with The FeedRoom transaction will
be subject to an agreement restricting the sale of those shares for 18
months.

KIT digital chairman and CEO Kaleil Isaza Tuzman also agreed to an
18-month lock-up for 1,312,000 of his current beneficially owned shares in
connection with The FeedRoom transaction, and acted as a personal
financial guarantor to the convertible promissory note in the Nunet
transaction.

Simultaneous with the acquisitions of Nunet and The FeedRoom, KIT digital
reached separate agreements to extinguish all past and future contingent
earn-out obligations related to the May 2008 acquisition of Kamera Content
AB and the October 2008 acquisition of Visual Connection, a.s., comprising
a total cash payment of $1.7 million and the issuance of 163,437
restricted shares to the former shareholders of Kamera and Visual
Connection. Neither the Nunet nor The FeedRoom acquisitions involve any
earn-out or contingent liabilities.

Following these acquisitions and the settlement of earn-out payments,
management estimates that KIT digital will have approximately 10.3 million
common shares outstanding and approximately $7.0 million of cash. This
includes payment of all deal-related expenses and the incurrence of
restructuring and severance charges related to the two acquisitions.

In light of these acquisitions expanding KIT digital's global footprint,
the company identified the need for an international auditing firm with
local practice capabilities in all its core markets, and on October 2,
2009 it appointed Grant Thornton LLP as its new independent public
auditor, replacing MSPC. The company also filed a Form S-3 shelf
registration today to provide flexibility in future strategic development
activity.

Robin Smyth, chief financial officer of KIT digital, commented, "In
addition to completing the Nunet and FeedRoom acquisitions, we have used
this post-funding and NASDAQ listing period to fulfill our promise to
eliminate contingent earn-out liabilities and select an international
auditing firm which can grow along with our global business. We have a
strong balance sheet and highly capable administrative supports, providing
us the foundation to take the company to the next level of growth."

Nunet Acquisition Terms
KIT digital acquired Nunet from IMG Worldwide
for approximately $11.1 million, comprised of $7.9 million in cash and
$3.3 million in the assumption of a convertible promissory note issued by
KIT digital. At the sole election of KIT digital, the promissory note may
be converted into stock or paid in cash installments over 18 months
starting in January 2010 at a 6.5% interest rate. Isaza Tuzman acted as a
personal guarantor of the promissory note.

The acquisition of Nunet is expected to be immediately accretive based on
an annualized recurring revenue stream of approximately $11.5 million and
over $2.3 million of annualized EBITDA (prior to merger-related
synergies).

As part of the acquisition, IMG Worldwide and KIT digital will enter into
a long-term commercial contract, under which KIT digital will continue to
provide IMG digital media services.

"Although IMG is focused on its core competencies and shedding assets that
don't fit with our overall strategy, selling Nunet was a difficult
decision," said Carmi Zlotnik, head of IMG media operations. "We believe
in the Nunet team and its future prospects, and are happy to have found a
great home for Nunet with market leader KIT digital -- and look forward to
working with the merged entity in the future."

"KIT digital's global presence and commitment to enterprise IP video
management made this acquisition superior in our view to other purchase
offers and the previously considered management buy-out of Nunet," said
Arnd Froehlich, Nunet co-founder and CEO. "We are excited to be teaming up
with the clear leader in the industry, and feel very confident about
working together to serve our valued customers."

Nunet has invested an estimated $22 million in its technology platform
since its inception in 1997.

The FeedRoom Acquisition Terms
KIT digital acquired The FeedRoom for
approximately 948,636 shares of KIT digital common stock, valued at
approximately $9.8 million using the closing market price on Friday,
October 2, 2009.

The FeedRoom's annualized revenue is estimated at more than $6 million.
The acquisition is cash-flow positive to KIT digital due to synergies in
G&A expenses realized immediately prior to and upon closing, with
projected annual EBITDA of more than $2.2 million.

As part of the transaction, The FeedRoom's controlling shareholders --
NewSpring Ventures, BEV Capital and Velocity Equity Partners -- invested
$4.0 million in KIT digital common shares, at a price of $11 per share,
through the conversion of The FeedRoom Series F Preferred Shares purchased
at closing.

"KIT digital and The FeedRoom share a common vision to be the provider of
choice for the large corporate or government client employing IP video,"
said Marc R. Lederman, general partner of NewSpring Capital and director
of The FeedRoom. "From a strategic perspective, KIT digital's coordinated
acquisition of The FeedRoom and Nunet assets is a coup. This combination
underscores the first truly global, '3-screen' IP video platform company.
We see significant upside for our investors as the KIT management team
continues to execute on the strategy embarked upon when they took over the
enterprise in January 2008, which led us to re-invest in the business at
closing."

The FeedRoom has invested an estimated $35 million in its technology
platform since its inception in 1999.

Merriman Curhan Ford & Co. acted as strategic advisor to KIT digital on
its acquisition of The FeedRoom.

Press Conference
KIT digital chairman and CEO Kaleil Isaza Tuzman and
president Gavin Campion will host a press conference at MIPCOM in Cannes,
France today to provide further details of the acquisitions.

When:
Monday, October 5, 2009 from 15:30-16:30 CET

Who:
Kaleil Isaza Tuzman, chairman and CEO of KIT digital
Gavin
Campion, president of KIT digital

Where:
Palais de Festivale, Cannes, France, in Auditorium G.
Cocktails
and appetizers will be served.

Contact:
Sharron Silvers, KCSA Public Relations
Tel +1-212-896-1282 or
+1-646-287-0433
ssilvers@kcsa.com

Investor Conference Call
Further details of the transaction will be also
presented in an investor conference call hosted by the management of KIT
digital at 10:00 a.m. Eastern time tomorrow:

When:
Tuesday, October 6, 2009 at 10:00 a.m. Eastern Standard Time (USA)

Who:
Kaleil Isaza Tuzman, chairman and CEO of KIT digital
Gavin
Campion, president of KIT digital
Robin Smyth, chief financial officer
of KIT digital

Details:
Dial-in number (North America): +1-800-895-0198
Dial-in
number (outside of North America): +1-785-424-1053
Conference ID:
7KITDIGITAL

Contact:
Matt Glover, Liolios Group, Inc.
Tel 1+949-574-3860

info@liolios.com

Please call the conference telephone number at least 5-10 minutes before
the scheduled start to allow for processing time. If there is any
difficulty connecting with the conference call, please contact the Liolios
Group at +1-949-574-3860.

The conference call will be broadcast simultaneously and available for
replay via the Investor Relations section of the company's website at
www.kitd.com.

A replay of the call will be available after 2:30 p.m. Eastern time on the
same day and until November 06, 2009.

Toll-free replay # (North America): + 1-800-283-8217 International replay
# (outside of North America): + 1-402-220-0868 (No passcode required)

About Nunet AG
Established in 1997 in Cologne, Germany, Nunet is a
global leader in video management for broadband, mobile and IPTV. Key
clients include Mobilkom, Proximus, SFR, Vodacom and Vodafone Group,
along with leading broadcasters and content producers, including
Discovery Channel, Eurosport International, Fashion TV, IMG Worldwide and
MTV Networks.. In 2004, Nunet developed Mobile TV, launching the first
six channels for in November that year. In 2005, Nunet rolled out Mobile
TV across multiple international markets. Today, Nunet runs more than 300
Mobile TV channels in 20 territories. IMG took 100% ownership of Nunet on
January 1, 2007. For additional information, go to www.nunet.de.

About The FeedRoom
Established in 1999 in New York City, The FeedRoom is
a pioneer in online video communications, and a market leader in live
video and digital asset management. With an unparalleled commitment to
customer service, The FeedRoom provides flexible online solutions that
optimize business and marketing communications for the enterprise,
government and media. Industry-leading organizations like Autodesk,
Barnes & Noble, Boeing, Bristol-Myers Squibb, Hewlett-Packard, Metlife
and The Pentagon rely on The FeedRoom's expertise to help engage
audiences, build brands, monetize content and manage digital media assets
more efficiently. For additional information, go to www.feedroom.com.

About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading, global
provider of on-demand Internet Protocol (IP)-based video asset management
solutions. Through its end-to-end software platform, "KIT VX," KIT
digital enables enterprise clients to acquire, manage and distribute
their video assets across the three screens of the computer Internet
browser, mobile device and television via an IPTV set-top box. KIT
digital clients' use of the VX platform ranges from end-consumer focused
video distribution to internal corporate deployments, including corporate
communications, human resources, training, security and surveillance. The
KIT digital client base includes over 470 enterprise customers across 30+
countries, including The Associated Press, Disney-ABC, Google, IMG
Worldwide, Kmart, NASDAQ, News Corp, RCS, Sensis, Telefonica, and
Verizon. KIT digital has principal offices in Prague, Melbourne
(Australia), New York, Toronto, London and Dubai. For additional
information, please visit www.kitd.com.

KIT digital Forward-Looking Statement
This press release contains
certain "forward-looking statements" related to the businesses of KIT
digital, Inc. which can be identified by the use of forward-looking
terminology such as "anticipates," "believes," "estimates," "expects" or
similar expressions. Such forward-looking statements involve known and
unknown risks and uncertainties, including uncertainties relating to
product development and commercialization, the ability to obtain or
maintain patent and other proprietary intellectual property protection,
market acceptance, future capital requirements, regulatory actions or
delays, competition in general and other factors that may cause actual
results to be materially different from those described herein as
anticipated, believed, estimated or expected. Certain of these risks and
uncertainties are or will be described in greater detail in our public
filings with the U.S. Securities and Exchange Commission. KIT digital is
not under any obligation to (and expressly disclaims any such obligation
to) update or alter its forward-looking statements whether as a result of
new information, future events or otherwise.

The securities offered in the acquisitions described in this press release
have not been registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.

KIT digital Contact:
Daniel Goodfellow
VP, Marketing and Communications
Tel. +1-646-873-3086
Email Contact

KIT digital Investor Relations Contacts:
Matt Glover
Liolios Group, Inc.
Tel. +1-949-574-3860
Email Contact

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