Entertainment technology company Rovi has purchased original DVR service TiVo for $1.1 billion, or $10.70 per share. Talks of such an acquisition heated up last month, and now it’s official — pending customary regulatory approval, of course.
That $10.70 per-share price represents a premium of approximately 40 percent over TiVo’s closing stock price of $7.66 on March 23 — the last trading day prior to media speculation about a possible transaction. It breaks down into $2.75 in cash and $7.95 in the new company’s common stock. Rovi stockholders will have an easy 1-for-1 swap for their own new stock.
The merged firms will be led by Rovi CEO Tom Carson, though it will adopt the TiVo brand as the new company name.
The Board of Directors for the combined company will include participation from TiVo’s current board. Both boards have approved the transaction — now it’s the government’s turn.
“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 Carson. “It’s an exciting time as the media and entertainment landscape undergoes a significant evolution.”
“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,” he continued. “By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders.”
“We’re proud of TiVo’s strong innovation history and of the ongoing efforts of our team to provide best-in-class products for our loyal consumer and service provider customers,” added TiVo’s Interim CEO and CFO Naveen Chopra. “This transaction is the culmination of those efforts and the logical next step for TiVo.”
“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,” Chopra concluded. “Our combination creates a more influential global player with a commitment to product innovation, which will be incredibly well positioned to redefine television.”
Evercore is serving as financial advisor to Rovi and Cooley LLP is serving as legal counsel. LionTree Advisors is serving as financial advisor to TiVo and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.
TiVo houses TiVo Research, a measurement firm that seeks to supplement industry currency for consumer behavior, including multi-platform viewership habits. The wing is partnered with Reality Mine this summer to analyze NBC’s Olympics.
TheWrap recently spoke with TiVo Research SVP Tara Maitra for a story on the state of TV ratings. When asked if the group will probably be bought out elsewhere, she replied, “Do I think that companies with money and resources out there will probably be interested to see what TiVo Research is doing? Sure.”
Below is the synergistic breakdown and explanation for the acquisition, as well as some forward-looking statements. All of the following is in the two companies’ own words.
This transaction brings together the technology and products required to achieve the company’s strategic goals and deliver substantial stockholder value.
TiVo’s leadership in user experience and content discovery brings together traditional television, OTT and on-demand content into one experience across devices
Rovi’s strength in guides, personalization, advertising, analytics and cloud services
On a pro forma basis, for the twelve months ended December 31, 2016, the combined company is estimated to have more than $800 million in revenue after purchase accounting adjustments
The combined company is expected to realize at least $100 million in annual cost synergies, with 65 percent of these synergies recognized in the first 12 months
The expected synergies are in addition to TiVo’s targeted current year $32 million Adjusted EBITDA increase from restructuring and margin improvements
The transaction is expected to be accretive to Rovi’s Non-GAAP EPS within the first 12 months post-close
Shared Customers, Global Reach
Rovi and TiVo serve many of the largest pay-TV operators both in the U.S. and around the world.
Combined benefits include enhanced global reach, serving nearly 500 service providers across countries, adding more than 10 million TiVo-served households to Rovi’s current base of approximately 18 million households using Rovi guides worldwide
Solutions will be integrated to deliver enhanced customer value and to strengthen relationships with top partners
Unique Company, Further Innovation
The transaction will create a company with a large presence in the consumer, consumer electronic, service provider and web-scale marketplaces
TiVo has played an iconic role in ushering in over a decade of rapid change in how consumers find, select, and watch television. These consumer innovations have also been successfully deployed for the benefit of service providers around the world
Rovi and TiVo have invested over $1.5 billion in R&D over the past 10 years. Few companies have had a greater impact on the evolution of TV and video.
This powerful combination of consumer innovation and service provider distribution will continue to be a unique asset of the combined company and will be further enhanced by Rovi’s prowess in areas like metadata, conversational search, and data analytics
Strong Intellectual Property Portfolios and Licensing Business
Together, Rovi and TiVo have worldwide portfolios of over 6,000 issued patents and pending applications worldwide.
Both Rovi and TiVo have been successful in monetizing their innovations and intellectual property, with more than $3 billion in combined IP licensing revenues and past damage awards
TiVo’s IP assets, combined with Rovi’s recent OTT partnership with Intellectual Ventures, further strengthens the company’s collective position as a leading provider of intellectual property in media and entertainment discovery
The Most Powerful Analytics in the Industry
The combined company will offer the industry’s most powerful analytics platform dedicated to media and entertainment, helping service providers and media companies strengthen consumers’ connections to the content they love.
Industry leading monetization products for services providers, advertisers and media companies, with access to data from multiple platforms including television, mobile and cloud services
TiVo’s unique cross-device viewership data merged with Rovi’s analytics tools will enable better targeting of media spend, improved advertising inventory yield and the creation of targeted advertising capabilities for service providers, advertisers and media companies
TiVo’s cross-device viewership data will enhance Rovi’s Operator Insights and Subscriber Analytics tools to give service providers more visibility and more precise methods to improve customer retention and manage churn
31 Shows at Risk of Cancellation - and Their Survival Chances (Photos)
Will your favorite show be canceled or renewed for next season? TheWrap looked at several factors to see if several low-rated shows -- from "American Crime" to "Sleepy Hollow" to "Criminal Minds" to "Undateable" to "Nashville" -- will be back this fall.
"American Crime" (ABC)
"American Crime" gets great reviews, and brings prestige to ABC's lineup. It looks likely to survive.
"Castle" (ABC)
"Castle" has had a long run, it's expensive to produce, and it's already syndicated, which means lots of money long-term. ABC has to calculate: What does it have to gain by keeping the show on the air? The news that Stana Katic is exiting the show could, counter-intuitively, be a good sign: It would be less expensive to produce, in theory.
"The Muppets" (ABC)
It's ratings won't blow anyone's mind, but coupled with delayed viewings, the show hits the "good enough" level for a sitcom. And ABC took a big swing with this "Muppets" update, and won't want to give up easily. So it will probably be back.
"The Catch" (ABC)
"The Catch" gets weak ratings, but it's good reviews were probably enough to buy it a little more time on ABC, the lowest-rated broadcast network. This one just recently started and doesn't have a place in the fall lineup, so the network has time to decide how badly it wants to keep executive producer Shonda Rhimes happy. She's done a lot for the network.
Nashville (ABC)
This is probably the end of the road for "Nashville," though people have thought that many times before. Hayden Panettiere just returned from some personal time off, but she may get more soon.
Dr. Ken (ABC)
Its ratings are probably just barely good enough to keep it alive. It's a Friday series, and nothing does very well on Friday.
"Last Man Standing" (ABC)
It does a little better than "Dr. Ken," so we like its odds. Tim Allen may keep his ABC time slot.
"The Real O'Neals" (ABC)
Its ratings are just good enough. And it likely benefits from the same question as other ABC sitcoms: Does the network have anything better with which to replace them?
ABC has probably already milked this "Captain America" spinoff for all it's worth. The Hayley Atwell vehicle hasn't made enough of a mark.
"Galavant" (ABC)
This was a favorite of former ABC entertainment chief Paul Lee, who is no longer around to revive it yet again. It's gone.
"The Family" (ABC)
This look at a child's apparent return from the dead probably hasn't made enough of an impact to save it from its own death. While the ratings aren't impressive, the slow-burner has gained some momentum lately.
"Criminal Minds" (CBS)
It easily has strong enough ratings to come back. CBS knows procedurals, and it knows this one works.
"Criminal Minds: Beyond Borders" (CBS)
The "Criminal Minds" spinoff "Beyond Borders" doesn't do nearly the same numbers "Criminal Minds" does, but it recently hit its best post-debut numbers. That will help its renewal chances -- plus, crossovers!
"The Odd Couple" (CBS)
Its ratings are definitely unimpressive for a CBS comedy, but the spring series doesn't really need a decision right this minute. For now, we'll err on the side of the show slowly dropping until cancellation eventually becomes a mercy killing. Or maybe we'll let Matthew Perry and Thomas Lennon throw egg on our face next year.
"Life in Pieces" (CBS)
It's ratings are strong enough to make it likely to return. CBS seems to like the Colin Hanks-starrer paired with big hit "The Big Bang Theory."
"Limitless" (CBS)
The ratings are decent, and would CBS really cut off its Bradley Cooper connection? We think this one is safe. See the next slide for some more evidence.
"Supergirl" (CBS)
"Supergirl" isn't a sure thing. But many critics support it, and its overall ratings would be solid by most networks' standards. (CBS likes hits, and isn't shy about it.) Super synergy should help. "Supergirl" has already crossed over with CW's "The Flash." And though it exists in a separate universe from the films, it could get a bump from DC movie releases including "Batman v Superman" and "Suicide Squad." We're guessing CBS gives it another shot, and network President Les Moonves already suggested it will be among freshman series renewals.
"CSI: Cyber" (CBS)
Neither ratings nor reviews are very good for the latest "CSI" spinoff. Unplug.
"Rush Hour" (CBS)
"Rush Hour" should have stayed on the big screen. This adaptation gets terrible ratings, so we don't even expect it'll finish its initial run.
"The Grinder" (Fox)
The ratings are not good. But Fox's top executives seem to like the Rob Lowe/Fred Savage sitcom, so that's something. A coin flip, probably.
"Sleepy Hollow" (Fox)
There was a lot of hate for the Season 3 finale, in which someone we liked apparently died. The show will likely die with this character. (We're avoiding gender pronouns in case you haven't seen it.)
"Grandfathered" (Fox)
You can blame corporate America if the show doesn't return. ABC Studios owns the show, not 20th Century Fox, and Fox likes to keep things in the (corporate) family these days. Speaking of family, John Stamos might be willing to go quietly back to his -- or at least the one he has on Netflix. More "Fuller House" is coming.
"Bordertown" (Fox)
The ratings are nowhere near where they need to be. And let's be honest, do you know any adult who's seen this show? Courting the teens is great, but they don't have the money that advertisers want to see.
"Second Chance" (Fox)
The ratings aren't good enough for "Second Chance" to get one. (Sorry, that was hacky and we apologize.) It also doesn't help awareness with the number of name changes this flop has gone through.
"The Carmichael Show" (NBC)
Jerrod Carmichael's show gets passable ratings, and, more importantly, gets people talking -- like it did with its exploration of the Bill Cosby allegations earlier this year. This one's coming back.
"Undateable" (NBC)
Live or pre-taped, the Chris D'Elia comedy just isn't working out, ratings-wise. Since NBC seems to have little interest in comedy lately, this looks like a break-up.
"Crowded" (NBC)
Carrie Preston will always have a place in our hearts for her wonderful work on "The Good Wife," but "Crowded" just isn't pulling ratings -- even behind "Little Big Shots" on Sundays. Too early to say for sure, but it doesn't feel like it needs to -- or will -- come back in 2017.
"Mysteries of Laura" (NBC)
The Debra Messing series will probably be saved based on its overall viewership. Those who age out of the 18-49 demographic may not be an advertiser's first choice, but they have money -- just ask CBS.
"Heartbeat" (NBC)
The show underwent a name change and seasonal change before it even premiered, and has had little pulse, ratings-wise. We're calling it.
"Telenovela" (NBC)
Eva Longoria's "Telenovela" has a chance to come back, but not a great one. Its lead-in, "Superstore," was rewarded with a second season a while back, but there's a big ratings gap between the two.
"You, Me and the Apocalypse" (NBC)
Great cast, terrible ratings, the end is nigh.
Wow, you're a diehard for cancellations news to have made it this far! Thank you. For a deeper dive into the fate of broadcast's bubble shows, click here.
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Will your favorite show survive to next season? We’ll give it to you straight
Will your favorite show be canceled or renewed for next season? TheWrap looked at several factors to see if several low-rated shows -- from "American Crime" to "Sleepy Hollow" to "Criminal Minds" to "Undateable" to "Nashville" -- will be back this fall.
