Xperi Corporation and TiVo Corporation have comfirmed the two companies have entered into a definitive agreement to combine in an all-stock transaction, representing approximately $3 billion of combined enterprise value.
The merger agreement provides for a 0.455 fixed exchange ratio, which implies a 15% premium to TiVo’s shareholders based on each of Xperi’s and TiVo’s 90-day volume-weighted average share prices. At close, Xperi shareholders will own approximately 46.5% of the combined business, and TiVo shareholders will own approximately 53.5%.
“This landmark combination brings together two highly complementary companies poised to set the industry standard for user experiences across the digital value chain,” said Jon Kirchner, Chief Executive Officer of Xperi.
“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.”
“There is more content, and more ways to enjoy that content, than ever before,” said David Shull , Chief Executive Officer of TiVo.
“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.”
In light of the business combination, 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 at a later date.
David Shull said, “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. While we previously planned to separate our product and IP licensing businesses in April 2020 , we believe today’s combination with Xperi will enable us to create even more value for our shareholders in both the near and long term by allowing each to go to market with greater financial and operational scale.”
Following the completion of the transaction, Xperi’s Chief Executive Officer, Jon Kirchner , will serve as Chief Executive Officer of the new parent company and Xperi’s CFO, Robert Andersen, will serve as Chief Financial Officer. TiVo’s Chief Executive Officer, David Shull , will continue as a strategic advisor to ensure a successful integration.
The Board of Directors of the new parent company will consist of seven directors, including Xperi CEO Jon Kirchner , in addition to three directors appointed by Xperi and three directors appointed by TiVo. The Chair of the Board will be selected by the independent directors of the Board.
The new parent company will assume the Xperi name but will continue to provide entertainment services under the TiVo brand, alongside Xperi’s premium DTS®, HD Radio®, and IMAX® Enhanced brands. The company will be headquartered in San Jose, California.
