TiVo to merge with Xperi | Major Businesses | Business | News | Rapid TV News
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In a combination that the parties say is intended to create a leader in consumer and entertainment technology and IP licensing, Xperi Corporation and TiVo have entered into a definitive agreement to combine.
TivoEDGE 3Oct2019
The all-stock transaction has been valued at approximately $3 billion of combined enterprise value of which Xperi shareholders will own approximately 46.5% of the combined business, and TiVo shareholders will own approximately 53.5%.The new parent company will assume the Xperi name but will continue to provide entertainment services under the TiVo brand, alongside Xperi’s premium DTS, HD Radio, and IMAX Enhanced brands.

The new company had $1.09 billion in TiVo revenue and Xperi billings and more than $250 million in operating cash flow on a pro forma basis for the twelve months ended 30September 2019. Additionally, the companies expect to achieve at least $50 million of annualised run-rate cost savings by the end of 2021 through the integration of their respective product and IP licensing businesses, the majority of which are expected within the first twelve months after closing.

Explaining the rationale behind the deal, the two companies say that the volume of entertainment content has exploded, with more ways than ever before to access it. TiVo brings to the partnership content aggregation, discovery and recommendation while Xperi has presence and product capabilities in the home, automotive, and mobile device ecosystems.

The merger is claimed to enhance significantly the scale and reach for each business, providing opportunities for both revenue synergies and cost savings. The combined entity will serve businesses ranging from content providers to consumer electronics and automotive manufacturers, and TiVo and Xperi say that the combined entity will provide an entertainment platform for tens of millions of individual consumers and a platform for the discovery, delivery, and monetisation of content.

The first step in the combined company’s value creation plan will focus on integrating the companies’ respective product and IP licensing businesses. There are more than 10,000 patents and applications between the two companies and what is said to be minimal licensee overlap.

“This landmark combination brings together two highly complementary companies poised to set the industry standard for user experiences across the digital value chain,” said Xperi CEO Jon Kirchner. “Together, we will be able to integrate TiVo’s leading content aggregation, metadata, discovery and recommendation capabilities with our home, automotive, and mobile technology solutions to help our customers create experiences that excite and delight consumers.”

“There is more content, and more ways to enjoy that content, than ever before,” added TiVo chief executive officer David Shull. “In a rapidly expanding and fragmenting digital universe, consumers want and need to be able to easily find and enjoy the content that matters to them...Now, we can significantly expand our mission.”

The transaction has been approved by the boards of directors of both companies and is expected to close during the second quarter of 2020, subject to regulatory approvals, the approval by the shareholders of each company, and other customary closing conditions. Following the completion of the transaction, Kirchner, will serve as chief executive officer of the new parent company. Shull, will continue as a strategic advisor to ensure a successful integration.