Combining two of the largest pay-TV vendors, Rovi announced that it's buying TiVo for $1.1 billion.
The cash and stock deal, which Rovi expects to close in the third quarter, creates a new company valued, Rovi said, at around $3 billion and armed with nearly 6,000 patents and $800 million in annual revenue. The deal, the company added, will create $100 million in synergies, with TiVo combining its expertise in advanced set-tops and user interfaces with Rovi's knack for meta data, programming guides and ad tech.
Rovi CEO Tom Carson will lead the merged corporation.
"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 in a statement. "By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders."
Added Naveen Chopra, Interim CEO and CFO of TiVo. "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. Our combination creates a more influential global player with a commitment to product innovation, which will be incredibly well positioned to redefine television."
As explained by the New York Times, Rovi's pursuit of TiVo is tied to a proxy fight last year in which activist investor Glenn Welling's Engaged Capital took two seats on Rovi's long entrenched board.
Previously, all five Rovi board members had held their positions since the company was formed through the 2008 merger of Macrovision and Gemstar.
TiVo, which was one of the first companies to debut a digital video recorder in the 1990s, has managed to remain independent for nearly two decades, despite recurring acquisition rumors from potential suitors like Arris and Technicolor.
TiVo said last week that it now has 7 million customers using its interface, most of them through partnerships with small and mid-sized MSOs.
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