Tough luck if you’re one of the investors that poured $66 million into Web video firm The FeedRoom.
According to a release, the FeedRoom’s revenue was about $6 million a year, a less-than-2X revenue multiple. But KIT Digital says the acquisition will be cash-flow positive, with projected EBITDA more than $2.2 million a year, because KIT Digital will immediately cut The FeedRoom’s general and administrative expenses.
KIT Digital, formerly ROO Group, is a rare, publicly held microcap Web company, led since late 2007 by Kaleil Isaza Tuzman, the former CEO of govWorks, a NYC startup whose rise and fall was documented in the excellent documentary Startup.Com.
KIT also announced today that it has acquired Nunet, which handles video for mobile devices. KIT is paying $8 million in cash and $3.3 million in a promissory note, which can be converted into stock or paid in cash over 18 months starting in January 2010. In a rare twist, KIT CEO Isaza Tuzman is acting as a personal guarantor of the promissory note.