TiVo to be Acquired by Rovi Corporation

Personalized entertainment and audience discovery specialist Rovi Corporation is spending around $1.1bn to buy 'next generation TV' and audience analytics firm TiVo. The TiVo name will be retained for the combined corporation.

The deal represents $10.70 per share in cash and stock, made up of approximately $2.75 in cash and $7.95 in shares of common stock of a new holding company owning both firms. The offer represents a premium of around 40% over TiVo's closing price of $7.66 on March 23rd, the last trading day before media speculation began over the deal.

TiVo is still widely known for its pioneering development of DVR technology almost twenty years ago, but has adapted its business model and now makes its money from a combination of subscriptions sold with set-top boxes to consumers; licensing its technology to cable TV firms; and audience insights via its TiVo Research and Analytics division, the result of its acquisition of media measurement and analytics firm TRA Inc. in 2012. The company made headlines in October last year when it announced that in 'celebration' of the union of competitors comScore and Rentrak it would give away its TV ratings for free, from Q1 2016.

Rovi's main business is in technology solutions to get customised content in front of consumers - it licenses this to an array of clients and partners, and has more than 5,000 issued or pending patents worldwide. Adding TiVo's 'complementary products, services, and intellectual property assets' will produce a company combining this with traditional television and on-demand content, as well as strengthening the analysis offering, and with more than $800 million in annual revenue.

The combined firm will be led by Tom Carson (pictured), Rovi's President and CEO since 2011. TiVo Chief Executive Tom Rogers stepped down at the end of January after ten years in the role and CFO Naveen Chopra has been serving as Interim CEO.

Carson comments: 'The combined capabilities of TiVo and Rovi place us in a tremendous position to extend services across platforms and to a customer base that includes traditional, over-the-top and emerging players across the globe. By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders'.

Chopra says the tie-up is 'the logical next step for TiVo', adding: 'our customers, employees and stockholders will benefit from being part of a more diversified industry leader with significantly greater market opportunities. Our combination creates a more influential global player with a commitment to product innovation, which will be incredibly well positioned to redefine television'.

While the deal has been approved by the boards of both companies, the transaction is subject to customary closing conditions, including approval by both sets of shareholders. If successful in this it is expected to close in Q3 of 2016.

Web sites: www.tivo.com and www.rovicorp.com .