Rovi buys TiVo for $1.1B

Rovi has finally executed on its long-rumored acquisition of TiVo, with the set-top box company that had a major hand in changing how consumers watch TV being purchased – along with a treasure trove of user data – for $1.1 billion.

Rovi, which primarily provides digital entertainment guides, will pay $10.70 per share, a 13.6% premium on TiVo’s price Thursday.

The New York Times first reported a deal was in the works March 24, helping to boost TiVo shares 23% over the past several weeks.

TiVo shareholders will get $2.75 a share in cash and shares of a new holding company that will operate the two companies under the TiVo name.

Rovi’s current CEO, Tom Carson, lead the combined companies that will have estimated revenue of $800 million.

“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.

Rovi and TiVo combined will hold more than 6,000 patents related to TV and video technology; Rovi has 5,000 issued or pending patents for programming guides and discovery technology.

The two companies expect saving synergies of $100 million expected over the first year.

TiVo was the first major producer of digital video recorders for pay TV. Its most recent set-top box is the Bolt (starting at $300). It includes 4K video and streaming video services, as well as a new QuickMode for watching sports and other recorded content 30% faster. It also last year launched the 1 Terabyte Roamio OTA ($400) DVR for recording over-the-air TV broadcasts and accessing streaming services.

TiVo has a small, ,but strong list of operator partners including Virgin Media, Com Hem, Suddenlink Communications, Mediacom Communications, and RCN, and recently announced it has more than 7 million subscribers to it various services.

The deal is expected to close in Q3 2016. 

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn