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Rovi Corporation to acquire Sonic Solutions in $720m transaction

Rovi Corporation is to acquire Sonic Solutions in a stock and cash transaction worth about $720 million. The acquisition is structured as an exchange offer for all of the outstanding shares of Sonic common stock, to be followed by a merger. The move will enable Rovi to broaden its solutions to content owners, device makers, retailers and operators.

Rovi (formerly Macrovision), a provider of next generation guidance solutions including TotalGuide, discovery, metadata, advertising and networking technologies and Sonic, a provider of digital video authoring, playback and distribution technologies, are both leaders in the digital entertainment industry and together will bring an end-to-end solution that enables integration across the ecosystem.

Sonic has licensed its industry leading cloud-based digital media delivery infrastructure known as RoxioNow, to major retailers, movie studios and CE manufacturers. RoxioNow incorporates a catalogue of over 10,000 movies and TV programmes, 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.

The company’s DivX offering is distributed in over 350 million CE devices. The DivX player software has been downloaded over 100 million times per year and 500 million times cumulatively, and has had over 2.5 billion launches since 2009.

“Sonic’s broad offerings coupled with Rovi’s guide software and metadata will generate an expanded solution and a richer user experience. With a footprint spanning hundreds of millions of devices and households, Rovi believes this will expand its advertising distribution opportunity,” says the statement.

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 premium content.

Sonic directors and senior management, who own approximately 11.2% of Sonic's total equity, have agreed with Rovi to tender their shares and to vote any remaining shares that they own for the merger.

Story filed 23.12.10

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