Separation Intended to Unlock Shareholder Value
and Increase Flexibility in Pursuing Growing Market
Opportunities
TiVo Corporation (NASDAQ: TIVO) today reported that the
Company’s Board has unanimously approved a plan to separate its
Product and IP Licensing businesses.
Based upon an extensive review of strategic alternatives, TiVo’s
Board of Directors decided that separating its Product and IP
Licensing businesses is believed to be the best strategy to
maximize shareholder value. Accordingly, TiVo intends to spin out
its Product business to shareholders. Throughout the separation
process, the Board of Directors will continue to be open to
strategic transactions for each business that could create
additional stockholder value and is actively engaged in discussions
with parties interested in each of the businesses.
“In the rapidly evolving market landscape we now operate in, we
have determined that our Product and IP Licensing businesses will
be better positioned as standalone separate entities,” said Raghu
Rau, Interim President and Chief Executive Officer. “Operating
independently, these two businesses will have increased flexibility
to pursue new and growing market opportunities. We believe this
separation is the best way to maximize shareholder value, while
also enhancing the possibility of value-creating strategic
transactions.”
TiVo believes the separation of its Products and IP Licensing
and business will benefit shareholders for the following
reasons:
TiVo’s Product business - Consisting of our Platform
Solutions and Software and Services businesses. TiVo offers a suite
of component technologies that can be integrated into any of our
customers’ internally developed platforms or deployed as an
integrated TiVo solution for video service providers or retail
markets. As of December 31, 2018, there were an estimated 23
million households worldwide utilizing our Platform Solutions. For
the full year 2018, our Product segment generated $401 million in
revenue, with a large component of recurring revenue.
For content creators, service providers and consumers, TiVo
provides a trusted neutral platform to connect audiences to content
and monetize transactions. In addition to offering innovative and
market leading solutions to our customers, the keys to the Product
business success are scale, trust and neutrality. By separating
from our IP Licensing business, we believe that our Product
business can pursue a customer-first strategy without the
encumbrances or complexity of being tied to an IP Licensing
business. We expect that operating independently will open our
Product business up to greater receptivity from service providers,
content providers and device manufacturers, as well as potential
customers in new markets. In particular, as an independent Product
oriented company, we believe we can better drive market adoption of
our next generation products and develop additional innovative
solutions for our customers. TiVo’s Product business is at an
exciting time in its transformation, particularly with several new
product and business model launches later this year that will
enable us to increase footprint, create a new content network and
develop increased monetizable opportunities through advertising.
Along with our established portfolio of market leading technologies
and solutions, these new offerings will be foundational to the
long-term growth and profitability of our product business.
TiVo’s IP Licensing business - Our expansive and highly
valuable Rovi and TiVo patent portfolios encompass approximately
5,500 issued patents and pending applications worldwide. Hundreds
of millions of consumers have access to our innovations through
license agreements with leading video providers around the world.
Our licensees include traditional and new media video providers
across Pay-TV, OTT, Mobile, Consumer Electronics and Social Media
markets. For the full year 2018, IP Licensing revenue was $295
million, with a high percentage of this recurring revenue.
We believe the announced separation will enable our IP Licensing
business to pursue a broader horizontal licensing strategy and
capitalize on emerging growth opportunities. The ability to pursue
an independent strategy going-forward will allow the IP Licensing
business the freedom to focus on innovating around the new
frontiers of video entertainment and communications which are
developing beyond our traditional footprint and help to usher in
the next phase of the consumer video experience. As video
consumption continues to shift beyond traditional Pay TV into
internet, social media and mobile domains, we believe it is
important that the IP Licensing business can diversify beyond
traditional video content discovery and recording domains, into new
consumer applications and functionalities. The separation will
enable the IP business to strategically reinvest in its own
business, not only to solidify its strong, existing foundation, but
also to appropriately pursue new long-term growth opportunities. We
also expect that operating independently will provide the IP
Licensing business enhanced operational flexibility and the freedom
to pursue opportunities in new markets and geographies.
Transaction details:
- The separation is subject to the
satisfaction of customary closing conditions, including, among
others, obtaining final approval from the TiVo Board of Directors,
receipt of tax opinions, and the effectiveness of an applicable
registration statement with the Securities and Exchange
Commission.
- We will provide greater details
including the relationship between the Product and IP Licensing
businesses and corporate brand identities for each business as we
get closer to the spin-off date.
- Full management teams and boards for
both companies will be named in the months leading up to the launch
of the two companies. We anticipate having those teams in place for
each business before separation.
- We expect to complete this transaction
in the first half of 2020 through a tax-free spinoff of the Product
business to our shareholders and will be actively pursuing a ruling
from the IRS that the spin-off will be tax-free.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities, and shall not
constitute an offer, solicitation, or sale in any jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of that
jurisdiction.
About TiVo Corporation
TiVo (NASDAQ: TIVO) is a global leader in entertainment
technology and audience insights. From the interactive program
guide to the DVR, TiVo delivers innovative products and licensable
technologies that revolutionize how people find content across a
changing media landscape. TiVo enables the world’s leading media
and entertainment providers to deliver the ultimate entertainment
experience. Explore the next generation of entertainment at
tivo.com, forward.tivo.com or follow us on Twitter @tivo or
@tivoforbusiness.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as, “future”, "believe,"
"expect," "may," "will," "intend," "estimate," "continue," or
similar expressions or the negative of those terms or expressions.
These statements relate to, among other things, the planned
separation of TiVo’s Product and IP Licensing businesses, the value
creation associated with the separation and stand-alone businesses,
the future operating results of the stand-alone businesses, market
acceptance of and future business opportunities for the stand-alone
businesses, conditions to the separation of the businesses, the
tax-free nature of the separation, the timely establishment of
management teams and boards of directors of each of the stand-alone
companies, the expected relationship of the two businesses
post-separation, and the anticipated timing of the separation.
These forward-looking statements are based on TiVo’s current
expectations, estimates and projections, management’s beliefs and
certain assumptions made by the Company, all of which are subject
to risks and uncertainties that could cause actual results to vary
materially from those expressed in or indicated by the
forward-looking statements. Such statements involve Factors that
may cause actual results to differ materially include delays,
whether inside or outside the Company’s control, in the Company’s
planned separation of its Product and IP Licensing businesses,
failure to satisfy the conditions to the separation of the
businesses, failure to timely establish management teams and boards
of directors of each of the stand-alone companies, delays in
development, the failure to deliver competitive service offerings
and lack of market acceptance of any offerings delivered, as well
as the other potential factors described under "Risk Factors"
included in Annual Report on Form 10-K for the year ended December
31, 2018 and other documents of TiVo Corporation on file with the
Securities and Exchange Commission (available at www.sec.gov). TiVo
cautions you not to place undue reliance on forward-looking
statements, which reflect an analysis only and speak only as of the
date hereof. TiVo assumes no obligation to update any
forward-looking statements in order to reflect events or
circumstances that may arise after the date of this release, except
as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190509005886/en/
Investor RelationsDebi
PalmerTiVo Corporation+1 818-295-6651debi.palmer@tivo.com
Press RelationsLerin
O'NeillTiVo Corporation+1 408-562-8455lerin.oneill@tivo.com
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