TiVo has started to evaluate a “wide range of strategic alternatives” in an effort to achieve long-term value for shareholders.
The set-top box maker and media technology firm announced the move along with its fourth quarter and full year results, claiming that “TiVo’s stock price is at a level that the company and its board do not believe reflects the true value of the business.”
TiVo said the options it is looking at include “transformative acquisitions” that would accelerate its growth, combining its business with other leading players, or becoming a private company.
The company has hired investment and merchant banking firm, LionTree Advisors, to assist the board and management in looking at its options.
TiVo cited its technologies, solid cash flow from long-term IP license agreements, and guide deployments as reasons why it believes it is undervalued. The US-based company’s share price climbed by more than 12% in after hours trading.
For the three months ending December 31, TiVo reported a 15.1% decline in revenues to US$214 million. Operating income was US$2.94 million, down from US$19.9 million a year earlier. However, income from continuing operations, net of tax, was up 87% to US$18.4 million.
“I expect 2018 to be a transformational year for TiVo, a year where we will hone our focus on execution that drives growth,” said Enrique Rodriguez, president and CEO of TiVo.
“We need to determine the optimal path to maximise our value proposition, so we can best deliver shareholder value. I am very confident in our ability to succeed because we have an outstanding team to execute our next phase of growth.”
The news comes two months after online news service The Street reported that multiple private equity groups had expressed interest in acquiring TiVo.