Brean Capital Sees DivX Sale as Important Juncture in Turnaround for Rovi Corporation

In a report published Tuesday, Brean Capital analyst Todd Mitchell reiterated a Buy rating and $27.00 price target on Rovi Corporation ROVI. In the report, Brean Capital noted, “Yesterday, Rovi announced the sale of its DivX and MainConcepts businesses to a couple of private equity firms for a minimum of $52.5 million and up to $75 million. The sale unwinds the remaining piece of its Sonic acquisition, removes the tension between DivX and its core IP licensing efforts, and will raise almost enough proceeds to offset the recent acquisition of Veveo, a search and recommendation company which we believe is more aligned with Rovi strategically. The orderly disposition of DivX marks an important juncture for Rovi and gives us greater comfort that the company is refocused on executing the turnaround strategy outlined at its investor day. We reiterate our Buy rating and $27 price target.” Rovi Corporation closed on Monday at $22.78.
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Posted In: Analyst ColorReiterationAnalyst RatingsBrean CapitalTodd Mitchell
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