Rovi Acquiring TiVo for $1.1B, Will Take on the TiVo Name
As was widely expected, Rovi will pick up DVR company TiVo for $1.1 billion. Payment is mostly stock, with $277 million in cash. Rovi will pay $10.70 per share. The newly combined company will be called RiVo, with Tom Carson, Rovi's CEO, as its head.
The agreement combines Rovi's expertise in program guides, analytics, and cloud services with TiVo's set-top box and streaming video knowledge. TiVo's intellectual property made it valuable to Rovi, with the newly formed company in a strong position to expand its role in streaming entertainment. The two companies hold over 6,000 digital entertainment-related patents.
"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," Carson said.
Prior to this announcement, Rovi had a market value of $1.4 billion, while Tivo had a market capitalization of roughly $922 million. The acquisition should be complete in the third quarter of 2016.
"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," added TiVo CFO and interim CEO Naveen Chopra.
In late March, The New York Times reported that Rovi was in talks to buy TiVo.
One company will control the TV platform and the other TiVo's IP licensing. The separation should be complete in the first half of 2020.
TiVo did the math and found that fewer than half of TV consumers could find a skinny bundle service that streams their favorite channels.
A global survey by TiVo sees two distinct types of pay TV customers. Operators need to approach them differently in order to keep them happy.
While consumers still want a la carte service, which no provider offers, they're willing to pay less for an ideal lineup than they used to be.
While the deal could still fall apart, the two companies together would own over 6,000 patents. Often courted, TiVo has so far remained independent.
Now focused on search and discovery, Rovi hopes to create next-gen search products and bring them to market sooner.
Saying that its future is in entertainment discovery, Rovi lets DivX and MainConcept go for $75 million.