By Alex Kowalski
PBN Staff Writer
(Updated, 11:48 a.m.)
MIDDLETOWN – KVH Industries Inc., a provider of guidance and Internet systems for the maritime and defense industries, has acquired Headland Media Ltd., a multinational commercial provider of news, entertainment and training content, KVH announced Monday.
The Middletown-based firm, which operates a global network of mini-VSAT Broadband Internet devices, hopes to use its systems to utilize and expand on Headland’s nearly 20 million listener reach – providing “highly efficient, low-cost multicasting capability” and streamlining content delivery, which includes halting the delivery of DVDs to vessels, according to a company release.
The mini-VSAT also will allow KVH to expand its offerings by enabling Internet Protocol television technology for its maritime clients, using the media firm’s currently licensed offerings to provide content at lower costs. Its offerings include digitized newspapers (offered in 17 languages), music, movies, sports, and training and safety films.
“We believe that KVH’s capabilities will help Headland Media grow sales of its services,” Martin Kits van Heyningen, KVH CEO, said in prepared remarks, adding that, “having news, sports and premium movies available on our mini-VSAT Broadband network will help our sales efforts as well.”
Headland posted revenue of $12.2 million in 2012, with a 78 percent gross profit margin on the year. Subscription-based services comprised the bulk of revenue, with more than $10 million on the year.
KVH’s purchase – valued at $24 million – was made with $1 million of cash on hand and $23 million pulled from the company's existing credit facility, KVH spokesman Peter Rendell told Providence Business News. The interest rate on the loan is 1.5 percent, or 1.25 percent above the BBA Libor daily floating rate, according to Rendell.
Though the company expects the transaction to be accretive to earnings in 2013, Rendall said that company won’t estimate by how much until July, when comes up with a model that “it is comfortable talking [to the public] about.”
Founded in 2008, Headland clients include Marriott Hotels and Resorts, and Burger King restaurants in Ireland and England – in addition to thousands of customers on sea-going vessels and yachts, cruise ships and oil rigs.