Market Overview

TiVo Investors Pull Back As DVR Maker Announces Business Split

TiVo Investors Pull Back As DVR Maker Announces Business Split

Entertainment technology and audience insights company TiVo Corp (NASDAQ: TIVO) said in conjunction with its first-quarter report Thursday that it will split itself into two independent companies.

What Happened

TiVo's board of directors approved a move to split TiVo's product business from its IP licensing business, the company said in a press release.

The product segment consists of platform solutions and software and services businesses; they offer a portfolio of component technologies that can be integrated into its customers' internally developed platforms or used as an integrated TiVo solution for video service providers or retail markets.

The product business generated $401 million in revenue in 2018, and much of it was recurring, TiVo said. 

The IP licensing business includes the Rovi and TiVo brands and 5,500 issued patents and pending applications worldwide. The business generated $295 million in revenue in 2018, and most of it was recurring. 

Why It's Important

Breaking the company into two entities will better position the IP licensing business to grow through a horizontal licensing strategy and take advantage of emerging growth opportunities, the company said.

The IP licensing business will have better freedom to focus on innovation and address the "next phase of the consumer video experience."

What's Next

TiVo said it expects to complete the transaction in the first half of 2020 and said it will be a tax-free spinoff.

The stock was falling by 13.23 percent to $7.61 at the time of publication Friday. 

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Photo via Wikimedia

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