TiVo inks $3B merger with Xperi to create new ‘amazing entertainment platform’

The merger is expected to close in 2020

Entertainment firm TiVo, known for its DVR set-top boxes, is merging with California-based tech brand Xperi in a move both companies hope will drive sales and lure in more users.

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The all-stock transaction represents $3 billion in combined enterprise value.

TiVo said in a statement Thursday the deal will fuse its content aggregation and discovery capabilities with Xperi’s reach into the home, automotive and mobile tech markets to offer a new “amazing entertainment platform for tens of millions of individual consumers.”

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Customers with TiVo can watch titles from brands like Discovery and Virgin Media.

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“There is more content, and more ways to enjoy that content, than ever before,” TiVo CEO David Shull said in the memo. “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. Xperi’s annual licensing of more than 100 million connected TV units, and complementary relationships with major content providers, consumer electronics manufacturers, and automotive OEMs, our combined company will transform the home, car, and mobile entertainment experience for the consumer.”

As of 2016, a whopping 10 million people were still using TiVo devices, and with a combined 10,000 patents and applications between the two companies, the new IP-focused business could become one of the largest licensing companies in the world.

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The news comes as TiVo battles with other big content aggregation firms like Roku, whose streaming players cost $29.99, Amazon's Fire Stick at around $24.99 and Facebook's Portal TV at $149. TiVo devices run around $14 a month with a yearly subscription.

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The merger, which has been approved by the boards of directors of both companies, is expected to close in the second quarter of 2020. Each firm’s debt will be refinanced on a combined basis and the companies have secured $1 billion in financing from Bank of America and Royal Bank of Canada. The new parent company will assume the Xperi name.

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However, the new firm will continue to provide entertainment services under the TiVo brand.

Shares of the brands will be converted into shares of the new parent company based on a fixed exchange ratio.

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