TiVo Corp. agreed to merge with Xperi Corp. in a stock swap that creates a company worth $3 billion that owns entertainment technology and intellectual property and patent assets.
Jon Kirchner, CEO of Xperi, will be CEO of the new parent company, which will be called Xperi, and Xperi CFO Robert Andersen will be CFO. David Shull, chief executive officer of TiVo will continue as a strategic advisor to the new company.
The new company will continue to use the TiVo brand for its entertainment services.
TiVo has suspended its near-term plans to separate its product and IP businesses. Upon closing of the transaction, each company’s respective product and IP businesses will be integrated and operated as separate IP licensing and product business units. This will facilitate a potential separation of the combined businesses in the future, the companies said.
“This landmark combination brings together two highly complementary companies poised to set the industry standard for user experiences across the digital value chain,” said 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. Additionally, the combined company will continue to unlock the value of our strategic and sizable patent portfolios by bringing together our deep industry expertise and powerful innovation engines. Through greater scale and diversity, we will deliver attractive and sustainable long-term cash flow and shareholder value.”
Under the merger agreement the shares of TiVo and Xperi stockholders will be converted into the shares of the new parent company based on a fixed exchange ratio of 0.455 Xperi share per existing TiVo share. Upon completion of the merger, Xperi stockholders will own approximately 46.5% and TiVo stockholders will own approximately 53.5% of the new parent company on a fully diluted basis.%.
“TiVo’s management team and board have engaged in a comprehensive review of TiVo’s businesses over the past year, and we are confident that this combination with Xperi is the right path forward for all our stakeholders,” said Shull.
“There is more content, and more ways to enjoy that content, than ever before,” said 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 OEMs, our combined company will transform the home, car, and mobile entertainment experience for the consumer.”
Centerview Partners served as exclusive financial advisor to Xperi and Skadden, Arps, Slate, Meagher & Flom served as legal advisor. LionTree Advisors served as exclusive financial advisor to TiVo and Cooley served as legal advisor.
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