Digital TV guide provider Rovi said Friday it had agreed to acquire DVR technology pioneer TiVo for about $1.1 billion in a move that will more than double its customer base.
TiVo’s large library of patents may also be an attraction for Rovi, which already has more than 5,000 issued or pending patents dealing with programming guides and discovery tools for TV makers and online video providers.
Rovi’s guides accounted for slightly less than half of its $526 million in revenue last year, with the rest coming from licensing intellectual property to such companies as Time Warner Cable and AT&T.
“TiVo made a name for itself with its DVR technology, but the patents that make its DVR hardware and software work are proving to be more valuable,” Ars Technica reported.
Rovi will pay for the deal mostly in stock at $10.70 per TiVo share, a 40% premium over the closing price before a possible acquisition became the subject of media speculation. The shares were up 6%, at $9.98, in trading Friday.
“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,” Rovi’s CEO Tom Carson said in a news release.
According to the Los Angeles Times, the deal will add more than 10 million TiVo-served households to Rovi’s current global customer base for its guides of about 18 million households.
TiVo rose to prominence in the early 2000s, with its name becoming synonymous with DVRs, but as the New York Times reports, its dominance didn’t last long as satellite and cable providers incorporated DVR capabilities into their technology.
In September, TiVo launched the Bolt, which combines DVR features with apps to stream Netflix or Hulu content and a service to access recorded content on other devices.
“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,” TiVo Interim CEO and CFO Naveen Chopra said.