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.