Thursday, December 23, 2010
Rovi to Buy Sonic Solutions For $720 million
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Rovi Corp, formely Macrovision, will pay $720 million in cash and
stock to buy Sonic Solutions, which owns the popular digital video
player software DivX.
The two companies have signed a definitive agreement for Rovi to
acquire Sonic in a stock and cash transaction. The enterprise value
of the transaction is approximately $720 million and the per share
value of Sonic common stock at signing of the agreement is $14.17, a
38.2 percent premium to Sonic's 30 day average per share closing
price as of December 21, 2010. The acquisition is structured as an
exchange offer for all of the outstanding shares of Sonic common
stock, to be followed by a merger.
Rovi, a provider of next generation guidance solutions including
TotalGuide, discovery, metadata, advertising and networking
technologies and Sonic, a provider of digital video processing,
playback and distribution technologies, together will bring an
end-to-end solution that enables integration across the ecosystem.
The acquisition of Sonic will enable Rovi to broaden its solutions to
content owners, device makers, retailers and operators.
Sonic has licensed its cloud-based digital media delivery
infrastructure known as RoxioNow, to major retailers, movie studios
and CE manufacturers. RoxioNow incorporates a catalog of over 10,000
movies and TV programs, which are accessible through connected CE
devices such as digital televisions, Blu-ray players and mobile
phones. The RoxioNow technology is expected to be on over 30 million
connected devices by June 2011. Sonic?s DivX offering is distributed
in over 350 million CE devices. With a footprint spanning hundreds of
millions of devices and households, Rovi believes this will expand
its advertising distribution opportunity.
The combined company will be able to power the next generation of
digital entertainment offerings with content discovery, delivery, and
enhanced interactivity capabilities that support advertising and
drive consumer engagement. Integration between RoxioNow and
TotalGuide has already occurred as part of the TotalGuide general
availability release - RoxioNow's retail customers are supported
through TotalGuide. In the future, Rovi expects to power RoxioNow's
user experience with the same web services that power TotalGuide.
Rovi believes this integration will result in accelerated uptake of
"Rovi and Sonic share a vision for the future of digital
entertainment and how to deliver the best consumer experience
possible," said Fred Amoroso, president and CEO of Rovi Corporation.
"We believe Sonic has built an exciting portfolio that complements
Rovi?s TotalGuide as well as our broad portfolio of solutions.
Together, we believe the two companies will be able to address the
expanding digital entertainment market with unique capabilities that
will bring enhanced value to consumers."
"The digital entertainment sector is transforming at a faster rate
than just a year or two ago and consumers are seeking new ways to
discover and enjoy digital content, specifically premium content."
said Dave Habiger, president and CEO of Sonic Solutions. "By joining
forces with Rovi, we will provide the industry with a broad range of
solutions that strengthens our customers? ability to compete as
consumers? primary source for digital entertainment. For our
Hollywood studio partners, eager to expand digital delivery, the
larger footprint of our combined company enables them to market their
The transaction is subject to customary closing conditions and
regulatory approvals, as well as the valid tender of a majority of
the outstanding shares of Sonic common stock in the exchange offer,
on a fully-diluted basis. The exchange offer is expected to close
during the first quarter of 2011.