Home Newswire TiVo to split business into two independent companies

TiVo to split business into two independent companies

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TiVo has announced plans to separate its Product and IP Licensing businesses into two independent companies, following an extensive review of “strategic alternatives” for the firm.

TiVo’s Board of Directors has unanimously approved the plan, claiming that splitting up the business marks the best strategy for maximising shareholder value.

TiVo intends to spin out its product business to shareholders. However, it said that the board will “continue to be open to strategic transactions for each business” throughout the separation process, and is “actively engaged in discussions with parties interested in each of the businesses”.

The company believes selling off one or both parts of the separated company could create “additional stockholder value”.

“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, TiVo’s 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 maximise shareholder value, while also enhancing the possibility of value-creating strategic transactions.”

TiVo’s Product business consists of the company’s Platform Solutions and Software and Services businesses. As of December 31, 2018 the company estimated that there were 23 million households worldwide using its Platform Solutions.

TiVo’s IP Licensing business consists of the Rovi and TiVo patent portfolios and encompasses approximately 5,500 issued patents and pending applications worldwide.

The separation of the business is subject to final approval from the TiVo board and other customary closing conditions.

The company expects to complete the transaction in the first half of 2020 and is “actively pursuing” a ruling from the IRS that the spin-off will be tax-free.

More details about the relationship between the Product and IP Licensing businesses and corporate brand identities for each business are due to be announced closer to the spin-off date.

The news came as TiVo reported a 17% year-on-year decline in first quarter revenues at US$158 million, and an operating loss of US$8.02 million.

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