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TiVo buying video content discovery service, adds $100M to buyback

  • TiVo (TIVO +1.7%) is acquiring Digitalsmiths, provider of a cloud-based video content discovery service for pay-TV providers, for $135M in cash.
  • Digitalsmiths relies on user viewing and search activity (among other things) to offer personalized content recommendations. The company claims to have 46 U.S. and international clients, including 7 of the top-10 U.S. pay-TV providers.
  • TiVo states Digitalsmiths' current user base amounts to just 10% of "the total potential user base licensed under its current contracts," and expects the figure to rise to 50% within the next few years.
  • The deal gives TiVo another product to sell to pay-TV providers, as well as $20M in net operating losses (NOLs) it can use to cut its tax bill.
  • Separately, TiVo says it's adding $100M to its buyback plan. That raises TiVo's total authorization to $186M (good for repurchasing 12% of shares at current levels).
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