Rovi Seals Deal for TiVo

But big questions remain as combined company, which will keep the TiVo brand, acts on integration plan
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Rovi has closed its $1.1 billion acquisition of TiVo, and now the new company, which will retain the TiVo brand, will move ahead to an integration phase that will shape the company’s organization as well as the fate of a product lineup that spans user interfaces, DVRs and other video devices, and a collection of search and recommendation services and technologies.

RELATED: TiVo CEO: Rovi Deal Not a Patent Play

Tom Carson, president and CEO of the newly combined company, said the deal “passed with flying colors” during shareholder meetings Wednesday (September 7) and noted that the newly combined company can  move forward and begin to act on assumptions that went into the integration planning phase.

“The near term for us is really about pulling the two companies together and trying to get them humming as best we can,” Carson said.

Many big decisions are yet to come.

“We’ll go through each of the product lines -- everything from traditional set-top box guides to Internet connected guides to search [and] recommendations technologies, all of the [areas] where you have overlap and figure out what is best-of-breed and how do you want to optimize all of those solutions,” Carson said. “No decisions have been made on any of the product lines.”

And that includes what might be next for TiVo’s strategy around retail products. Of recent note, new FCC documents indicate that TiVo has been developing “Mantis,” a network DVR product with integrated OTA-TV capabilities that appears poised for introduction at the 2017 Consumer Electronics Show.

“The consumer business is something that is still of interest to us,” Carson said. “Having product in consumer's homes is beneficial on the product development side and can help us with the products we develop for service providers." 

But he did point out that the trend on the service provider side of the business – to offer software, apps and interfaces that are hardware-agnostic – is an angle that the new company will also be mulling on the retail front. 

If there are questions about how to go forward, “it’s about what's the right hardware strategy for the consumer business,” he said.

Notably, Rovi dropped a set-top box product that came way of its 2014 acquisition of Fanhattan, but retained (and later integrated) the Fan TV software/UI technologies that were tied to that deal.

Also to be decided is the effect the deal will have on headcount. Rovi, whose ranks expand to about 1,800 employees following the merger, believes that it can achieve about $100 million of synergies via the transaction, though that figure includes more than what can come way of the company’s workforce.

TiVo, which expects 65% of those synergies to be recognized in the first 12 months, said it will provide fiscal 2016 financial estimates on its next earnings call.

Regarding leadership, Rovi has already announced that Pete Thompson has come on board as EVP and COO and will oversee product integration activities and be based in San Jose. He’s replacing John Burke, who is leaving because personal reasons have prevented him from relocating from the east coast (Burke's been based at Rovi's facility in Radnor, Pa.).

Naveen Chopra, the interim CEO and CFO and SVP of corporate development & strategy at TiVo, will be staying on as an advisor through the end of the year, Carson said.

Former TiVo board members Daniel Moloney and Jeffrey T. Hinson are joining the new TiVo board following the closure of the acquisition.

As for drivers of the deal, Carson reiterated that international markets represent a “big opportunity” for the new company, as does the selling of guides and their discrete components such as search and discovery, metadata and “conversational services” used for voice navigation.

The new TiVo said it provides guide products to more than 25 million homes and serves more than 500 pay TV operators across 70-plus countries.

The combined company also generates about $800 million in annual revenues, a figure that Carson believes can grow to about $1 billion within the next three years.

The new TiVo will be traded on the NASDAQ market under the “TIVO” ticker.