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TiVo rules out major acquisition in ongoing strategic review

TiVo has said it is not looking to make a major acquisition as part of its ongoing strategic review, and instead highlighted the value of its product and IP licensing businesses.

Speaking on the company’s second quarter earnings call, interim president and CEO Raghavendra Rau said that “while we’re always open to strategic acquisitions that can deliver stockholder value, we do not believe, at this time, that utilising our capital for a significant acquisition would be the best way to deliver value for shareholders.”

Instead Rau stressed the financial operations of TiVo’s products and IP businesses and said that the company remains committed to developing “compelling and relevant solutions that can deliver value to our customers”.

“With respect to the product business, it appears clear that there is a real opportunity in the marketplace for a well-scaled next-generation video products business, with good growth potential that revolutionises how we watch TV and effectively enables monetisation of the experience,” said Rau.

TiVo currently has an installed base of around 22 million subscriber households and Rau said the company has a “great brand and platform” to power next generation entertainment experiences and targeted ad solutions.

“Further, with one of the leading portfolios of intellectual property in the linear TV and OTT markets, TiVo also believes there are strategic opportunities for the IP business that will enable the business to grow profitably in both existing and adjacent markets.”

For the three months ending June 30, TiVo reported a 17% year-on-year decrease in revenues at US$172.8 million. Adjusted EBITDA was down 36% to US$51.9 million.

TiVo first announced in February that it had 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 outlined 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 at the time that the options it was looking at included “transformative acquisitions” that would accelerate its growth, combining its business with other leading players, or becoming a private company.

TiVo board member Rau was appointed president and CEO in July after former TiVo boss Enrique Rodriguez resigned to become chief technology officer at Liberty Global in Europe, one of TiVo’s long-time global customers.