TiVo Nears All-Stock Merger Agreement With Xperi

(Bloomberg) -- TiVo Corp., the inventor of the digital video recorder, and technology licensor Xperi Corp. agreed to merge in an all-stock transaction that gives the combined company an equity value of $2.4 billion.

The deal values TiVo at a 21% premium to Wednesday’s closing price. TiVo shareholders would own 54% of the combined company, which would be run by Xperi Chief Executive Officer Jon Kirchner, according to a statement on Thursday, confirming an earlier Bloomberg News report.

Combining the companies could create at least $50 million in savings, according to the statement. The transaction also puts on hold TiVo’s announced plan to spin off its intellectual property unit.

TiVo rose as much as 8.9% to $8.59 in New York trading Thursday, giving the company a market value of about $1.1 billion. Xperi fell as much as 12% to $18.45, giving the company a market value of about $913 million.

San Carlos, California-based TiVo’s name became a verb in the 2000s, when it pioneered set-top hardware that let people record television shows and skip commercials. It lost ground in recent years to rivals including Roku Inc. and Apple Inc. that introduced set-top boxes that were cheaper and easier to use.

The company, which merged with rival Rovi Corp. in 2016, retained a financial adviser last year to explore strategic alternatives.

In May, it announced plans to split in two by spinning off its patent portfolio in the first half of 2020. That would have left TiVo with its product division, which offers streaming devices, digital video recording and software services.

Xperi, based in San Jose, California, licenses software that is used for playing back high-definition sounds on consumer electronics and imaging software that enables mobile-phone cameras to recognize faces, according to its website.

The company also licenses designs for the semiconductor industry.

Xperi’s customers include include Samsung Electronics Co., which was responsible for about 38% of its revenue in 2018, according to its annual report.

Centerview Partners and Skadden, Arps, Slate, Meagher & Flom advised Xperi, while LionTree Advisors and Cooley advised TiVo.

To contact the reporter on this story: Scott Deveau in New York at sdeveau2@bloomberg.net

To contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, John J. Edwards III

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