Rovi Buys TiVo in $1.1 Billion Deal (original) (raw)

DealBook|Rovi Buys TiVo in $1.1 Billion Deal

https://www.nytimes.com/2016/04/30/business/dealbook/rovi-buys-tivo-in-1-1-billion-deal.html

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A TiVo display at the International CES in Las Vegas in 2011. The combination of Rovi and TiVo will have more than 6,000 patents and pending applications.Credit...Steve Marcus/Reuters

April 29, 2016

As television moves to the cloud, two companies are coming together to try to find the silver lining.

TiVo, known for its devices that can record and stream television, agreed to be acquired by the Rovi Corporation, which makes the guides that allow users to scroll and click to watch shows. The $1.1 billion deal, announced on Friday, is a turning point for two companies that have fought ferociously to maintain their places in a rapidly changing industry.

More and more television viewers are migrating to YouTube or Netflix, creating a vulnerability for companies like TiVo and Rovi whose business models rely on traditional TV viewing habits. Adding TiVo’s 10 million households to Rovi’s 18 million, as well as its research and development team and patent trove, arms the combined company to compete, analysts said.

“There are real questions around durability of what these guys have created, so they’re coming together to fight the good fight,” said Barton Crockett, an analyst at FBR Capital Markets, by phone. “They’re in a place of tremendously large question marks right now.”

The deal may not happened without recent decisions by two men.

The first is Glenn W. Welling, an activist investor at Engaged Capital who successfully claimed two seats on Rovi’s board last year and pushed the company to consider a merger with TiVo, people briefed on those discussions said last month.

The second, Thomas S. Rogers, led TiVo as chief executive for more than a decade until he announced in November that he was stepping down. He stayed on as chairman as Naveen Chopra, TiVo’s chief financial officer, stepped up as interim chief executive. The management shuffle gave Rovi a chance to make its move.

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