Business
Rovi will buy TiVo for $1.1 billion, and the combined company will go by the name TiVo.
Reuters reports:
Rovi Corp, a provider of digital television guides, said on Friday it would buy video recorder pioneer TiVo Inc in a $1.1 billion deal that brings together two video software players with deep patent portfolios. The combined company, which will add Tivo's 10 million customers to Rovi's 18 million customers, will be led by Rovi Chief Executive Tom Carson, who said he first thought about a potential merger between the two companies when he took over as CEO four years ago. "We had been looking at doing this for quite a while. We play in similar businesses," Carson said in an interview, adding that it would have been too challenging to do the deal last year when Rovi's licensing agreement with AT&T was up for renewal. The $10.70 per-share cash-and-stock offer represents a premium of 13.6 percent to TiVo's Thursday closing share price. Rovi said it would pay TiVo shareholders $2.75 per share in cash and the remaining in stock, with TiVo shareholders ending up owning roughly a third of the combined company, which will go by the name TiVo.
"Rovi’s acquisition of TiVo, with its innovative products, talented team, and substantial intellectual property portfolio, strengthens Rovi’s position as a global leader in media discovery, metadata, analytics, and IP licensing," said Rovi CEO Tom Carson in a statement. "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." TiVo CFO and interim CEO Naveen Chopra added: "In joining forces with Rovi, our customers, employees and stockholders will benefit from being part of a more diversified industry leader with significantly greater market opportunities."
The Wall Street Journal notes:
The transaction, subject to regulatory approval and closing conditions such as approval by both company’s shareholders, is expected to add to Rovi’s adjusted profit within 12 months after the close. Current Rovi shareholders are projected to own between 66.8% and 72.9% of the new holding company. The stock component of the consideration is expected to be a tax-free exchange for TiVo shareholders.
