KVH Industries Acquires Headland Media

Middletown, RI, May 13, 2013 – KVH Industries, Inc. announced that it has acquired Headland Media Limited, a UK-based media and entertainment services company. Headland Media is a provider of commercially licensed news, sports, movies, and music content that they sell in the maritime, hotel, and retail markets.

“The acquisition of Headland Media supports our strategic vision of extending our maritime broadband service to also include delivering premium content to vessels,” said Martin Kits van Heyningen, KVH’s chief executive officer. “We’ve captured a leading market share in the maritime VSAT market for one-to-one connectivity, and are now rolling out a new, highly efficient, low-cost multicasting capability that we believe will create significant growth opportunities for Headland Media’s content by eliminating the time and cost of physically delivering DVDs to vessels. For KVH’s mini-VSAT Broadband service, Headland Media’s premium content offers us a great opportunity to create exciting new services that will help our customers keep their crews happy, and in the process help us differentiate our service and increase our ARPUs,” van Heyningen added.

Headland Media has 115 employees, and offices in the UK, Europe, the United States, India and the Philippines. Headland Media has established relationships with content providers and a customer base of 9,600 vessels, 1,700 hotels, and 1,700 retail outlets receiving their various services. In 2012, Headland Media generated revenue of $12.2 million, of which approximately 85% was derived from annual subscription-based services. During that same period, the gross profit margin was almost 78%. 

Headland Media provides television shows, premium movies, sports, news channels, and music for exhibition in commercial locations, which include ships at sea. KVH’s capabilities to multicast data in the background during network idle times, and cache, manage, and distribute data onboard vessels using its Integrated CommBox Modem (ICM) will serve as key enabling technology for Headland Media’s services. Headland Media’s broad content range, which KVH intends to deliver over the mini-VSAT Broadband network, will also enable KVH to bring Internet Protocol television (IPTV) technology to the maritime market.

The $24.0 million transaction is anticipated to be accretive to KVH earnings per share in 2013. The company financed the transaction from its cash on hand and proceeds from its existing credit facility.