TiVo Merging With Xperi in $3 Billion Transaction

DVR pioneer TiVo has shelved plans to separate its legacy set-top hardware business from software licensing and is merging with Xperi, a marketer of audio technology in an all stock deal worth about $3 billion.

The company will operate under the Xperi corporate name while TiVo will continue to operate its brand name. Xperi CEO Jon Kirchner will be chief executive of the combined companies with CFO Robert Andersen assuming the same position. TiVo CEO Dave Shull, who took the position in May, will serve as a strategic advisor.

“This landmark combination brings together two highly complementary companies poised to set the industry standard for user experiences across the digital value chain,” Kirchner said in a statement.

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With more than 10,000 patents and applications between the two companies and minimal licensee overlap, the combined IP business will be one of the largest licensing companies in the world.

Together, the companies expect to benefit from a larger and stronger platform to drive growth, accelerate time-to-market, and improve IP licensing monetization and outcomes. The product business expects to pursue substantial cross-selling opportunities especially in its home and automotive markets.

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The new company had $1.09 billion in TiVo revenue and Xperi billings topped more than $250 million in operating cash flow on a pro forma basis for the twelve months ended Sept. 30, 2019.

The companies expect to achieve at least $50 million of annualized run-rate cost savings by year-end 2021 through the integration of their respective product and IP licensing businesses, the majority of which are expected within the first twelve months after closing. These cost savings are incremental to those that are expected as a result of TiVo’s ongoing cost-transformation plan.

“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,” Shull said.  “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.”

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