TiVo, Xperi to Merge in $3 Billion Entertainment Tech Deal

TiVo

"The transaction creates a leading consumer and entertainment technology business and one of the industry’s largest intellectual property licensing platforms," the firms say.

Xperi Corp. and TiVo Corp. said Thursday that they have entered a definitive agreement to combine in an all-stock entertainment technology deal with an enterprise value of approximately $3 billion.

Xperi sells audio, imaging and computing technology products. TiVo had previously planned to split into two companies, one focused on products and the other on intellectual property.

"The transaction creates a leading consumer and entertainment technology business and one of the industry’s largest intellectual property (IP) licensing platforms with a diverse portfolio of entertainment and semiconductor intellectual property," they said.

Xperi shareholders will own approximately 46.5 percent of the combined business, and TiVo shareholders will own approximately 53.5 percent. The combined firm, headquartered in San Jose, Calif., will use the Xperi name, but continue to provide entertainment services under the TiVo brand, alongside Xperi brands, such as HD Radio and Imax Enhanced. 

"There is more content, and more ways to enjoy that content, than ever before,” said TiVo CEO 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. TiVo has always been the company that brings entertainment together. Now, we can significantly expand our mission. With Xperi’s annual licensing of more than 100 million connected TV units, and complementary relationships with major content providers, consumer electronics manufacturers and automotive original equipment manufacturers, our combined company will transform the home, car and mobile entertainment experience for the consumer.”

“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."

Kirchner will serve as CEO of the merged company, with Xperi CFO Robert Andersen continuing in that role for the enlarged firm. Shull will serve as a strategic advisor "to ensure a successful integration," the companies said.

The companies said they had $1.09 billion in combined TiVo revenue and Xperi billings and more than $250 million in operating cash flow for the 12 months ended in September.

The companies expect at least $50 million of annualized cost savings by year-end 2021 through the integration of their businesses in addition to TiVo’s ongoing "cost transformation plan." The combined company also expects revenue synergies "by bringing new, innovative solutions to consumer electronics and automotive companies to help address the massive shift in media and entertainment distribution and consumption."