Rovi is buying TiVo for $1.1 billion

Rovi is buying TiVo for $10.70 per share in cash, or about $1.1 billion.

According to a statement Friday, the combined company will be called TiVo, retaining the name of the firm that popularized DVR.

"Rovi's acquisition of TiVo, with its innovative products, talented team, and substantial intellectual property portfolio, strengthens Rovi's position as a global leader in media discovery, metadata, analytics, and IP licensing," said Tom Carson, CEO of Rovi, in the statement. Carson will be CEO of the combined company.

Rovi will pay $2.75 per share in cash, or about $277 million. The remainder of $7.95 per share will be paid in shares of common stock of a new holding company that will own both firms.

The statement noted that Rovi's offer represents a 40% premium to Tivo's closing price of $7.66 on March 23.

The deal possibly comes following pressure from Glenn Welling of Engaged Capital, who got two seats on Rovi's board last year, the New York Times earlier reported.

The new TiVo would have about $800 million in revenue after purchase accounting adjustments at the end of the full-year 2016, the companies said.

Both boards have approved the deal and it is expected to close in the third quarter.

Evercore is Rovi's financial advisor, and LionTree Advisors is serving TiVo.