Rovi to acquire Sonic Solutions for $720 mln

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Digital entertainment company Rovi Corporation has announced a deal to acquire Sonic Solutions a cash-and-stock deal valued at $720 million. Rovi Corporation specializes in providing entertainment information—think programming guides—along with DRM and content networking technology, while Sonic Solutions is the outfit behind many digital video streaming services, including Blockbuster movie streaming, Best Buy’s CinemaNow service, and Sonic’s own RoxioNow service that’s now built into hundreds of consumer electronics products from a wide range of manufacturers.

Rovi says the combined company will continue to offer digital content services, along with new content discovery and engagement features that create a more interactive experience—the idea is that the overall package of services (Sonic’s streaming combined with Rovi’s TotalGuide solutions) will be even more appealing to consumer electronics manufacturers.

“Rovi and Sonic share a vision for the future of digital entertainment and how to deliver the best consumer experience possible,” said Rovi president and CEO Fred Amoroso, in a statement. “We believe Sonic has built an exciting portfolio that complements Rovi’s TotalGuide as well as our broad portfolio of solutions.”

The $720 million Rovi acquisition follows Sonic’s acquisition of DivX earlier this year for over $300 million.

Rovi is offering $14.17 per share of Sonic stock, which represents a 38.2 percent premium on the stock’s 30-day average closing price as of December 21. Under the deal, Sonic shareholders can choose to receive either $14 per share or 0.2489 shares of Rovi stock for every share of Sonic they hold. Some 55 percent of Rovi’s offer is in cash; the rest is in stock. The companies expect the deal to be concluded in the first quarter of 2011.