Rovi Corp to acquire digital-video recording maker TiVo for $1.1 bn

30 Apr 2016

US digital entertainment guides Rovi Corp yesterday struck a deal to buy digital-video recording firm TiVo Inc, for $1.1 billion, in order to create a $3 billion entertainment technology company.

Under the terms of the deal, Rovi will pay $10.70 per-share cash-and-stock, a premium of 13.6 per cent to TiVo's closing share price on Thursday.

Rovi will pay TiVo shareholders $2.75 per share in cash, or approximately $277 million. The remainder, $7.95 per share, will be paid in shares of common stock of a new holding company that will own the merged company.

Post closing, Rovi stockholders will own between 66.8 per cent and 72.9 per cent of the new company, which will rebrand itself TiVo, while TiVo shareholders will own roughly a third.

The combined company is expected to realise at least $100 million in annual cost synergies, with 65 percent of these synergies coming in the first 12 months.

Founded in 1997, TiVo is the developer of first commercially available DVR.

The California-based company is a global leader in advanced home entertainment service for virtually any platform or device. It offers services directly to customers as well as to cable, satellite and broadcasting companies.

Apart from the US, TiVo services are available in Australia, Canada, Mexico, New Zealand, Puerto Rico, Sweden, Taiwan, Spain and the UK.

TiVo's cloud-based Software-as-a-Service solutions enable viewers to consume content across multiple screens in and out-of-the home. TiVo allows the user to navigate 'content chaos' by seamlessly combining live, recorded, on-demand and over-the-top television into one intuitive user interface with simple universal search, discovery, viewing and recording from a variety of devices.

Formed through the 2008 merger of Macrovision and Gemstar, Rovi, also based in California, is one of the largest owners of patents for digital entertainment devices with more than 5,000 issued or pending patents worldwide.

It provides digital entertainment technology solutions for the discovery and management of entertainment content. It offers guidance, home network connection, content protection, and media recognition technologies, as well as extensive metadata on movies, music, games, television, and books.

The company's media guide technology is an interactive on-screen portal to entertainment content from the Internet, broadcast, and personal content, and also offers home networking technology to simplify the transfer of content from one device to another within the home.

The transaction will create a company with a large presence in the consumer, consumer electronic, service provider and web-scale marketplaces.

Rovi and TiVo have invested over $1.5 billion in R&D over the past 10 years, and the deal will increase the new company's global reach, serving nearly 500 service providers across countries, adding more than 10 million TiVo-served households to Rovi's current base of approximately 18 million households using Rovi guides worldwide.