Kit Digital's former CEO offers to take company private
(Reuters) - Kit Digital's KITD.O former chief executive said he would be willing to lead a private equity-backed buyout of the company, two days after the video technology provider said it would restate results.
Ex-CEO Kaleil Isaza Tuzman, who left Kit Digital earlier this year in a major management shakeup, said he would be willing to lead a bidding group that would offer to buy the company at $3.75 per share in cash, valuing the company at about$214.1 million.
Tuzman said he had discussed the possibility of the buyout with two private equity firms, but did not specify any names.
Kit Digital shares were down 60 percent at 81 cents on the Nasdaq on Friday morning. They had fallen as much as 80 percent after the bell on Wednesday on the news of the restatement.
The company disclosed accounting irregularities on Wednesday, for which it blamed the prior management, and said it would restate its results since 2009 due to errors and irregularities relating to recognition of revenue on certain perpetual software license agreements.
"The company's attempt to attribute its current problems to prior management is spurious," Tuzman said in a letter to Kit's board.
"During my tenure at the company, all revenue recognition decisions were made in consultation with and approved by the company's independent accounting firm," he added.
Tuzman, who resigned as CEO in March due to "irreconcilable differences" with the company's board, said his management team had recommended a major restructuring and consolidation of operations in December 2011, which was at that time rejected by the board.
Tuzman had faced scrutiny from the U.S. Securities and Exchange Commission over stock trades in 2010. He is currently a managing partner of private equity firm KCP Capital.
Tuzman, whose initials make up Kit Digital's name, currently has an about 4 percent stake in the company, according to Thomson Reuters data.
Kit provides services to some of the biggest technology, entertainment and media companies in the world including Google Inc (GOOG.O), HP (HPQ.N), Disney-ABC, MTV and BBC.
The company has undergone a management rejig since March and has lost more than 80 percent of it market capitalization in the last nine months. It has also been considering strategic alternatives, including a sale, for several months.
However, Tuzman said on Friday that the company has repeatedly delayed or stonewalled efforts of prospective bidders.
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