It's Official: Kontiki Spun Off to MK Capital

VeriSign confirmed today that its Kontiki peer-to-peer content delivery unit has been spun off to MK Capital, with VeriSign receiving $1 million in cash and 3,980,000 shares of the Purchaser's Series A Preferred Stock. There's no valuation available for MK preferred shares, but Dan Rayburn says the deal price had been rumored at $40 million. Reports of the deal first emerged last week.

Kontiki, which was founded in 2000 and acquired by VeriSign in 2006, keeps all its customers (including the BBC) and several members of the original Kontiki management team, including President Eric Armstrong and Todd Johnson, who was CEO of Kontiki and is now Chairman of the Board.

"We are very excited to be financing the expansion of Kontiki," said Mark Koulogeorge, principal, MK Capital. "The company has a unique and tested peer-to-peer (P2P) technology that addresses the need to efficiently distribute video over the Internet and private networks. The new generation of Internet users will demand video content in order to be engaged. As the use of video as a communication tool continues to expand, Kontiki's technology will be increasingly strategic to corporations worldwide."

Kontiki will be headquartered in Mountain View, California, with regional sales offices in Denver, Virginia, and London.

NewTeeVee has an interview with Armstrong, who says Kontiki delivered more than 3 million videos last month.

"VeriSign bought us because they had a vision that I think was very aspirational, to build a three-screen business: broadband, mobile and television