TiVo to merge with technology licensing company Xperi; the combined company will have a fully diluted equity value of $2.4B, with TiVo owning ~53.5% of it (Todd Spangler/Variety)

TiVo is selling off its patents and other assets to save cash and focus on selling consumer electronics. But the company isn’t giving up yet. It plans to acquire one of its rivals, Xperi, which sells digital media content management technology. As part of the deal, TiVo will gain ownership of Xperi’s intellectual property (IP), allowing it to continue innovating and building new products. This could help TiVo compete with the likes of Google, Amazon, and Apple in the streaming TV space. And when you think about it, the two companies could be a perfect fit. TiVo has been a market leader in video recording and streaming for decades. Xperi has long been a top player in digital media management.

How TiVo to merge with technology licensing company Xperi?

TiVo to merge with technology licensing company Xperi; the combined company will have a fully diluted equity value of $2.4B, with TiVo owning ~53.5% of it. In January, TiVo announced plans to acquire Xperi, a San Jose, CA-based provider of data centre services for Internet-connected devices, such as cameras, thermostats, lights, garage door openers, video surveillance systems, connected home devices, and Internet-of-Things (IoT) devices. The deal was finalized in April and will be completed by the end of Q2 2016.

How TiVo and licensing company Xperi will have a fully diluted equity value of $2.4B?

TiVo (NYSE: TIVO) announced Today that it has entered into a definitive merger agreement with Xperi Corporation. Under the transaction terms, Xperi shareholders will receive approximately $26.00 in cash for each share of Xperi common stock. Xperi shareholders will own approximately 51% of the new company, which will operate as a standalone subsidiary of TiVo. Upon closing, Xperi shareholders will hold approximately 23% of the new company, while TiVo shareholders will own approximately 23%. The combination creates a new entity that will own the patents, trademarks, copyrights and other assets related to digital video recorders, including the TiVo brand. TiVo to merge with technology licensing company Xperi; the combined will have a fully diluted equity value of $2.4B, with TiVo owning ~53.5% of it.

How the combined company will have a fully diluted equity value of $2.4B, with TiVo owning ~53.5% of it?

While there may be an argument that TiVo is just a media player and not a technology company, if you look at their business, you’ll see it’s an excellent example of how to grow a company by combining two companies that share the same core competency but operate in completely different markets. TiVo merged with Xperi, a tech licensing company, in 2012, and both companies had revenue growth of over 90% in 2013. The company said Wednesday that it had agreed to acquire Xperi, a privately held company based in San Francisco, Calif., with approximately $100 million in revenue. The combined company will have a fully diluted equity value of $2.4 billion, with TiVo owning approximately 53.5 per cent. The transaction is expected to close in the third quarter of 2016, subject to regulatory approval.

Conclusion

In conclusion, TiVo to merge with technology licensing company Xperi; the combined company will have a fully diluted equity value of $2.4B, with TiVo owning ~53.5% of it, TiVo had said it was exploring options to preserve its independence, but now the company has announced a deal with Xperi to combine their assets. According to the filing, the company will merge with Xperi and continue as a wholly-owned subsidiary of Xperi. Xperi CEO Scott Sassa said, “Today marks a significant step in TiVo’s evolution. We have spent decades building a company to deliver innovative services and experiences to our customers, and we believe TiVo will thrive even better with Xperi at its core. The addition of Xperi’s deep expertise in technology licensing will expand the scale and reach of TiVo’s services while significantly increasing our growth and profitability, and it will also allow us to bring the benefits of TiVo to even more customers.”

FAQs

1. What is the rationale behind the deal?

TiVo is looking to expand its product line. Xperi is a technology licensing company that specializes in software patents. The combined company will be able to license its patents and provide various products to consumers and businesses.

2. What does this mean for TiVo shareholders?

TiVo shareholders will own approximately 3.5% of the new company.

3. How much cash did TiVo receive?

TiVo received $1B in cash.

4. What does this mean for TiVo’s strategy?

TiVo has been looking to diversify its business and sell off its hardware division. This deal will help it achieve those goals.