KVH Industries Acquires Headland Media
May 13, 2013
KVH Industries, Inc., has
acquired Headland Media Limited, a media and
entertainment services company. Headland Media is
a leading 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.”
With extensive experience in the licensed content
business, UK-based 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%.
Speaking of the acquisition and the opportunities ahead,
Mark Woodhead, CEO of Headland Media, remarked, “We’re
excited to be part of the KVH family and to work with
our new colleagues in developing the next generation of
onboard entertainment services for ships at sea.
The trend towards digital delivery of movies, news, and
sports clips has been apparent to us for several years.
When we discussed KVH’s capabilities, there just seemed
to be a natural fit between their maritime VSAT service
and our news, sports, and entertainment content.”
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.
Mr. Kits van Heyningen concluded, “We see this
acquisition as a great start to KVH’s new initiative to
bring our customers the same high-quality multimedia
content they enjoy onshore, but have usually been unable
to receive over their maritime satellite service because
of either prohibitively high costs or protocol blocking
associated with service providers’ fair use policies.
We believe that KVH’s capabilities will help Headland
Media grow sales of its services, and that having news,
sports, and premium movies available on our mini-VSAT
Broadband network will help our sales efforts as well.”
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.