-
Combines Veveo’s unique personalization and contextual search tools
with Rovi’s robust search and recommendation engine and extensive
metadata
-
Enables faster, more meaningful and simplified entertainment search
and recommendation service for MSOs, device manufacturers and social
media companies
-
Brings strong customer relationships and adds Veveo’s growing
intellectual property portfolio to Rovi’s sizeable portfolio of
discovery-related IP
-
Accelerates Rovi’s cloud-based guidance strategy and complements the
company’s advertising and analytics offerings
-
Transaction expected to be accretive to Rovi in fiscal 2015
SANTA CLARA, Calif.--(BUSINESS WIRE)--
Rovi Corporation (NASDAQ: ROVI), a global leader in entertainment
discovery, today announced it has entered into a definitive agreement to
acquire Veveo, Inc., a provider of intuitive and personalized
entertainment discovery solutions based in Andover, Massachusetts. Under
the terms of the agreement, Rovi will pay approximately $62 million in
net cash at the closing and up to $7 million in additional cash payments
based on achievement of certain agreed-upon milestones.
The transaction combines Veveo’s personalization and contextual search
tools with Rovi’s robust search and recommendation engine and metadata
to create a truly differentiated entertainment discovery solution.
Veveo’s pioneering technologies include proprietary, Knowledge Graph
driven semantic technologies and natural-language controls that enable
the implementation of intuitive search and recommendation interfaces
operated by voice-based conversational commands and powered by an engine
that continually learns and adapts to the needs and tastes of the
individual viewer. By helping to drive contextual and personalized
entertainment search and recommendations, Veveo’s capabilities simplify
the process of connecting consumers to the TV programming and movies
that are most relevant to them at any given moment across a range of
devices. Veveo solutions have been adopted by leading device
manufacturers and Tier-1 service providers. The company has more than 80
patent applications filed and 50 patents granted to date.
Rovi’s search and recommendation capabilities are supported by its rich
metadata offering, which includes detailed information and professional
editorial on millions of movies, TV shows, sports programming, music,
games, and books. Rovi continues to expand the reach of its metadata,
which currently spans 55 countries. The addition of Veveo’s
personalization capabilities and contextual search and natural language
expertise will help further differentiate core Rovi discovery
capabilities, and enhance Rovi’s ability to drive a compelling
next-generation digital entertainment discovery solution for
multiple-system operators (MSOs), device manufacturers and social media
companies.
“The Veveo acquisition will deepen Rovi’s cloud-based search and
recommendation capabilities, enhance our entertainment metadata and
guide solutions with next-generation semantic capabilities, and help us
grow our advertising and analytics offerings,” said Tom Carson,
President and CEO of Rovi. “Veveo has developed a great set of
technologies and is a clear strategic fit for where we are going as a
company. This transaction positions us for leadership in search and
recommendation, which is consistent with our stated focus on
establishing leadership in targeted market segments. Rovi is enhancing
its capabilities to deliver more and better discovery solutions, as our
customers look to personalize the consumer entertainment experience
across multiple screens and platforms.”
“MSOs, device manufacturers, and social media companies recognize the
value and opportunity in taking today’s static discovery and
recommendation engines to the next level by incorporating intelligent
data, contextual search, predictive analytics, semantic technologies and
natural language controls,” said Ajit Rajasekharan, co-founder of Veveo.
“By combining our leading offerings, Rovi and Veveo are in a prime
position to help our customers differentiate through truly intelligent
and personalized entertainment discovery.”
Rovi also updated the Company’s business outlook for fiscal year 2014 by
announcing that the acquisition would likely lower Adjusted Pro Forma
Income Per Common Share in fiscal 2014 by $0.03 to $0.06. The Veveo
business is expected to contribute double digit revenue growth and be
accretive in fiscal year 2015. Rovi plans to provide additional details
on the transaction when it reports its first quarter fiscal year 2014
results.
The acquisition is subject to customary closing conditions and is
expected to close shortly.
About Veveo
Veveo is a leading provider of semantic technologies to bridge the
usability gap in connected devices and applications with intelligent
search, discovery and personalization solutions.
With tens of millions of deployments worldwide through leading device
OEMs and Tier-1 service providers, Veveo is redefining how users
experience connected devices and applications in natural and intuitive
ways. Based on the company’s patented Smart Knowledge Platform, Veveo
products enable advanced solutions for search, recommendation, discovery
and navigation that offer intelligent, intuitive and efficient
usability. These technologies further enable the implementation of
intelligent conversational interfaces to bridge the gap in usability for
connected devices and applications with natural language and
speech-based interfaces.
Veveo’s semantic solutions are designed to deliver rich,
hyper-personalized user experiences that anticipate user intent, driving
higher engagement, content consumption, and monetization of products and
services for device vendors, service providers and enterprises, across
platforms of smartphones, tablets, TVs, and set-top boxes. Founded in
2004, Veveo is based in Andover, MA and has a growing intellectual
property portfolio.
About Rovi
Rovi is leading the way to a more personalized entertainment experience.
The company’s pioneering guides, data, and recommendations continue to
drive program search and navigation on millions of devices on a global
basis. With a new generation of cloud-based discovery capabilities and
emerging solutions for interactive advertising and audience analytics,
Rovi is enabling premier brands worldwide to increase their reach, drive
consumer satisfaction and create a better entertainment experience
across multiple screens. Rovi holds over 5,000 issued or pending patents
worldwide and is headquartered in Santa Clara, California. Discover more
about Rovi at Rovicorp.com.
Non-GAAP or Adjusted Pro Forma Information
Rovi Corporation provides non-GAAP or Adjusted Pro Forma (APF)
information. References to APF information are to non-GAAP pro forma
measures. The Company provides APF financial information to assist
investors in assessing its current and future operations in the way that
its management evaluates those operations. APF information is not a
substitute for any performance measure derived in accordance with GAAP.
APF Income Per Common Share is a supplemental measure of the Company’s
performance that is not required by, and is not presented in accordance
with, GAAP.
APF Income Per Common Share is calculated using APF Income.
APF Income is defined as GAAP income from continuing operations, net of
tax, adding back all of the adjustments used in calculating APF
Operating Income and further adding back non-cash items (such as the
amortization or write-off of debt issuance costs, non-cash interest
expense recorded on convertible debt under ASC 470-20, mark-to-market
fair value adjustments for interest rate swaps, caps and foreign
currency collars and discrete tax items including reserves) and items
required to be recorded under GAAP which impact comparability, but that
the Company believes are not indicative of its core operating results
(such as payments to note holders and for expenses in connection with
the early redemption or modification of debt, and gains on sales of
strategic investments).
APF Operating Income (or APF Operating Margin) is defined as GAAP
operating income from continuing operations adding back non-cash items
other than depreciation (such as equity-based compensation, amortization
of intangibles, and asset impairment charges) and items required to be
recorded under GAAP that impact comparability, but that the Company
believes are not indicative of its core operating results (such as
transaction, transition, integration and restructuring costs). While
depreciation expense is a non-cash item, it is included in APF Operating
Income as management considers it a proxy for capital expenditures.
The Company's management has evaluated and made operating decisions
about its business operations primarily based upon Adjusted Pro Forma
Income and Adjusted Pro Forma Income Per Common Share. Management uses
Adjusted Pro Forma Income and Adjusted Pro Forma Income Per Common Share
as measures as they exclude items management does not consider to be
“core costs” or “core proceeds” when making business decisions.
Therefore, management presents these Adjusted Pro Forma financial
measures along with GAAP measures. For each such Adjusted Pro Forma
financial measure, the adjustment provides management with information
about the Company's underlying operating performance that enables a more
meaningful comparison of its financial results in different reporting
periods. For example, since Rovi Corporation does not acquire businesses
on a predictable cycle, management excludes amortization of intangibles
from acquisitions, transaction costs and transition and integration
costs in order to make more consistent and meaningful evaluations of the
Company's operating expenses. Management also excludes the effect of
restructuring and asset impairment charges, expenses in connection with
the early redemption or modification of debt and gains on sale of
strategic investments. Management excludes the impact of equity-based
compensation to help it compare current period operating expenses
against the operating expenses for prior periods and to eliminate the
effects of this non-cash item, which, because it is based upon estimates
on the grant dates, may bear little resemblance to the actual values
realized upon the future exercise, expiration, termination or forfeiture
of the equity-based compensation, and which, as it relates to stock
options and stock purchase plan shares, is required for GAAP purposes to
be estimated under valuation models, including the Black-Scholes model
used by Rovi Corporation. Management excludes non-cash interest expense
recorded on convertible debt under ASC 470-20, mark-to-market fair value
adjustments for interest rate swaps, caps, foreign currency collars, and
the reversals of discrete tax items including reserves as they are
non-cash items and not considered “core costs” or meaningful when
management evaluates the Company's operating expenses. Management
reclassifies the current period benefit or cost of the interest rate
swaps from gain or loss on interest rate swaps and caps, net to interest
expense in order for interest expense to reflect the swap rates, as
these instruments were entered into to control the interest rate the
Company effectively pays on its debt.
Management is using these Adjusted Pro Forma measures to help it make
budgeting decisions, including decisions that affect operating expenses
and operating margin. Further, Adjusted Pro Forma financial information
helps management track actual performance relative to financial targets.
Making Adjusted Pro Forma financial information available to investors,
in addition to GAAP financial information, may also help investors
compare the Company's performance with the performance of other
companies in our industry, which may use similar financial measures to
supplement their GAAP financial information.
Management recognizes that the use of Adjusted Pro Forma measures has
limitations, including the fact that management must exercise judgment
in determining which types of charges should be excluded from the
Adjusted Pro Forma financial information. Because other companies,
including companies similar to Rovi Corporation, may calculate their
non-GAAP financial measures differently than the Company calculates its
Adjusted Pro Forma measures, these Non-GAAP measures may have limited
usefulness in comparing companies. Management believes, however, that
providing Adjusted Pro Forma financial information, in addition to GAAP
financial information, facilitates consistent comparison of the
Company's financial performance over time. The Company provides Adjusted
Pro Forma financial information to the investment community, not as an
alternative, but as an important supplement to GAAP financial
information; to enable investors to evaluate the Company's core
operating performance in the same way that management does.
Forward Looking Statements
All statements contained herein that are not statements of historical
fact, including statements that use the words “will” or “is expected
to,” or similar words that describe the Company’s or its management’s
future plans, objectives, or goals, along with when the acquisition
transaction is expected to be closed, or when the acquisition
transaction is expected to be accretive to Rovi, are “forward-looking
statements” and are made pursuant to the Safe-Harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that could cause the actual results of the Company to be
materially different from the historical results and/or from any future
results or outcomes expressed or implied by such forward-looking
statements, including the risk that the transaction will not be
consummated and the risk that Rovi does not succeed in making the
transaction accretive. Such factors are further addressed in the
Company’s most recent report on Form 10-K for the period ended December
31, 2013 and such other documents as are filed with the Securities and
Exchange Commission from time to time (available at www.sec.gov).
The Company assumes no obligation to update any forward-looking
statements in order to reflect events or circumstances that may arise
after the date of this release, except as required by law.
Rovi Corporation
Chris Taylor, 408-562-3077
[email protected]
Source: Rovi Corporation