The whispered-about acquisition of TiVo by Rovi became a reality April 29, when Rovi announced a $1.1 billion cash-and-stock agreement to add TiVo and its technologies to its portfolio.
And Rovi CEO Tom Carson couldn’t sound more pleased about it.
“This transaction clearly establishes our company as the industry-leader in content discovery and analytics, driving innovation for our customers and creating value for our stockholders,” he said during a call with investors. “In addition to best-of-breed products and services, the combined company will have the strong portfolio of intellectual property in the industry with over $3 billion in cumulative combined revenues … .”
The importance of the deal can’t be understated: by acquiring TiVo, Rovi expects to now generate $1 billion in revenue each year, and now has a combined IP portfolio covering more than 6,000 patents.
The addition of TiVo’s technologies gives Rovi the ability to offer unprecedented media discovery and analytics services across devices and platforms, now covering 500 service providers in 28 million homes across 75 countries. And Rovi will also adopt the TiVo name, a nod to the importance of the brand.
“Media and entertainment landscape is undergoing significant transformation leading to both opportunity for us and importantly for our customers,” Carson said. “Consumers are more engaged with content than ever before, but the increasingly fragmented nature of the market presents challenges for both end users and service providers. Turning on our strong legacy of innovation, the combination of Rovi and TiVo will redefine the media experience and enhance viewer engagement for our customers, for our employees and for our stockholders.”
Naveen Chopra, interim CEO and CFO of TiVo, said that since TiVo launched its first DVR in 1997, the company has “fundamentally changed” how people consume TV. The combined company will continue to have that exact same goal in mind going forward.
“First, [the combined companies] will create the market’s largest entertainment software provider with hundreds of operator, consumer electronic and content owner relationships,” Chopra said. “Second, there are clear opportunities to combine product offerings and create end-to-end solutions for service provider partners. We can integrate and bundle software, cloud services, metadata, advertising and analytics.
“Third, our combination will allow us to apply significant R&D capability and leverage our consumer DNA across an even broader group of products and customers. Fourth, we will have an opportunity to pair TiVo’s unique viewing data with Rovi’s analytics tools and create a valuable data analytics platform with enhanced targeting capabilities.”
Rovi will acquire TiVo for $10.70 per share, paying $2.75 per share in cash, and $7.95 per share coming in common stock of a new holding company being formed. Rovi stockholders will continue to own one share of the new company.
Peter Halt, CFO of Rovi, said the deal has potential on both the product and intellectual property fronts. “The combination of the two makes for a much stronger and more robust portfolio and we fully expect as we would with our products that as we’re going forward with the combined business that the combined portfolios get licensed,” he said. “In terms of where we have overlapped, we would certainly expect any agreements that TiVo has and the agreements that Rovi have would continue.”