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TV patent giant Rovi ( ROVI ) on Friday announced a $1.1 billion deal to buy digital video recorder pioneer TiVo ( TIVO ) and adopt TiVo as its new corporate name. San Carlos, Calif.-based Rovi agreed to pay $10.70 a share in cash and stock for San Jose, Calif.-based TiVo. The acquisition had been rumored for several weeks. Rovi stock was down a fraction to about 17 in afternoon trading in the stock market today . TiVo stock was up more than 5% to near 10. “Rovi’s acquisition of TiVo, with its innovative products, talented team and substantial intellectual property portfolio, strengthens Rovi’s position as a global leader in media discovery, metadata, analytics and IP licensing,” Rovi CEO Tom Carson said in a statement . “It’s an exciting time as the media and entertainment landscape undergoes a significant evolution. “The combined capabilities of TiVo and Rovi place us in a tremendous position to extend services across platforms and to a customer base that includes traditional, over-the-top and emerging players across the globe.” Rovi has earned a reputation as a patent bully for its litigious behavior. This month, Rovi sued Comcast ( CMCSA ) for patent infringement after failing to come to terms on a new licensing agreement. Last year, Netflix ( NFLX ) successfully defended itself from a Rovi patent infringement lawsuit. A U.S. federal judge ruled that the five Rovi-owned patents it wielded against the streaming video company were invalid. Rovi holds more than 5,000 patents in areas such as digital entertainment guides, DVRs and on-demand programming. It generates the majority of its revenue through patent-licensing agreements with pay TV services. Once the TiVo acquisition closes, the combined company will have over 6,000 patents. Piper Jaffray analyst Michael Olson looked favorably on the deal. “The rationale for the deal makes sense, with overlapping customers and organizational goals, and synergies that could make the combined business more profitable,” he said in a report Friday. “Specifically, the company is expecting $100 million of cost synergies and that the deal will be EPS accretive within the first 12 months.” Olson reiterated his overweight rating on Rovi stock with a price target of 29. Olson noted that litigation is a component of both companies’ business models. Scalper1 News
Scalper1 News