Kit Digital Inc., a provider of software for online video that listed shares in Prague this year, climbed for a fifth day to its highest closing price on an agreement to buy U.S.-based Multicast Media Technologies Inc.
Kit gained 7.5 percent to 215 koruna. The stock has advanced 19 percent over the past eight trading days and stands 3.8 percent higher than when it started trading on the Czech stock market on Jan. 25.
The company said yesterday it agreed to buy Multicast, an Atlanta-based provider of internet broadcasting and multimedia communications, for about $18 million to expand its presence in the U.S., increase revenue and boost cash-flow.
“This is positive news for Kit” as “several synergies could be realized” between Kit and Multicast, Prague-based analyst Josef Nemy at Komercni Banka AS, the Czech unit of Societe Generale SA, wrote in a report to clients today.
In Kit’s primary Nasdaq trading, the shares rose 4 percent to $12 as of 10:30 a.m. in New York, their highest intraday price since July 31. They rose 8.9 percent to $11.54 yesterday after the acquisition report.
Kit Digital also agreed to buy back about 4 million of its outstanding warrants in the first quarter, using proceeds from a recent $15 million share sale, it said.
The warrants “have caused high volatility in the company’s quarterly earnings and therefore we believe that removing them from the balance sheet is a good step,” Nemy said in the report.
Kit Digital provides software to some 600 clients including Hewlett-Packard Co. and Vodafone Group Plc. The company, with about 300 employees in countries such as Germany, the U.S. and Australia, moved its headquarters to Prague from Dubai in 2009.
The Prague Stock Exchange will decide this week whether Kit has met market-capitalization and trading-volume requirements for inclusion in the main PX index, according to spokesman Jiri Kovarik. A regular quarterly reweighting of the index will take effect on March 22, he added.