Xperi Corporation (NasdaqGS:XPER) entered into a merger agreement to acquire TiVo Corporation (NasdaqGS:TIVO) for $1.2 billion in a merger of equals transaction on December 18, 2019. Under the terms of the merger agreement, if the mergers are completed, Xperi stockholders will be entitled to receive one new parent company common stock for each share of Xperi common stock held and TiVo stockholders will be entitled to receive 0.455 shares of new parent company common stock for each share of TiVo common stock held at the effective time. Upon completion of the merger, Xperi stockholders will own approximately 46.5% and TiVo stockholders will own approximately 53.5% of the new parent company on a fully diluted basis. Upon closing of the transaction, each company's respective product and IP businesses will be integrated and operated as separate IP licensing and product business units. The new parent company will assume the Xperi name but will continue to provide entertainment services under the TiVo brand, alongside Xperi's premium DTS ®, HD Radio®, and IMAX® Enhanced brands. The company will be headquartered in San Jose, California. In connection with the transaction each company's debt will be refinanced on a combined basis. To meet this objective, TiVo and Xperi have secured $1.1 billion of committed financing from Bank of America, BofA Securities, Inc. and Royal Bank of Canada. Termination fee payable by Xperi to TiVo shall be equal to $44 million in cash, and such fee payable by TiVo to Xperi shall be equal to $50.8 million in cash.

Following the completion of the transaction, Xperi's Chief Executive Officer, Jon Kirchner, will serve as Chief Executive Officer of the new parent company and Xperi's Chief Financial Officer, Robert Andersen, will serve as Chief Financial Officer. TiVo's Chief Executive Officer, David Shull, will continue as a strategic advisor to ensure a successful integration. The Board of Directors of the new parent company will consist of seven Directors, including Xperi Chief Executive Officer Jon Kirchner, in addition to three Directors appointed by Xperi and three Directors appointed by TiVo. The Chair of the Board will be selected by the independent Directors of the Board. As of May 29, 2020, the new parent company approved an increase in the size of the Board from six to seven directors. Later on May 29, 2020, all of the current directors from the Board were removed and former members of the board of directors of Xperi, Jon Kirchner, Christopher Seams, David Habiger and Darcy Antonellis and former members of the board of directors Laura of TiVo, Durr, Daniel Moloney and Raghavendra Rau were designated and appointed. The transaction is subject to regulatory approval, approval from shareholders of Xperi and TiVo, registration statement becoming effective, antitrust approval from U.S. Federal Trade Commission and Republic of Korea Competition, listing of new shares on stock exchange, effectiveness of registration statement and the receipt of a tax opinion by each of Xperi and TiVo from their respective counsels to the effect that each of the mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

The transaction has been approved unanimously by the Boards of Directors of Xperi and TiVo. The Boards of both Xperi and TiVo recommended that their respective shareholders vote in favor of the transaction. The shareholders meeting will be held on May 29, 2020. As of January 21, 2020, Federal Trade Commission (FTC) granted the early termination notice. A strategic committee of the TiVo board was formed to review the transaction. On January 31, 2020, TiVo entered into an amendment to the merger agreement which eliminates the requirement under the merger agreement for the Board of Directors of TiVo to pass certain resolutions or take other necessary actions. On April 29, 2020, the Korean Fair Trade Commission (the “KFTC”) notified Xperi that the transactions contemplated by the merger agreement, as reported to the KFTC, did not violate Article 7, Paragraph (1) of the Korean Monopoly Regulation and Fair Trade Law, subject to customary obligations to report certain changes to the KFTC. On May 29, 2020, shareholders of both TiVo and Xperi approved the transaction. The transaction is expected to be completed during the second quarter of 2020. The transaction is expected to have significant incremental annual revenue within five years of closing.

Centerview Partners LLC acted as financial advisor and fairness opinion advisor and Kenton King, Mike Ringler, clerk Michelle Cho, Kristine Dunn, Leila Sayegh, Karen Corman, Joseph Yaffe, Nathan Giesselman, Maria Raptis and Ken Kumayama of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors for Xperi Corporation. LionTree Advisors, LLC acted as financial advisor and provided fairness opinion and Jon Gavenman, Steve Tonsfeldt, Ian A. Nussbaum, Wendy Brenner, Megan Browdie, Patrick Flanagan, Adit Khorana, Kristin Leavy, Buff Miller, Barbara Mirza, Howard Morse, Marina Remennik, Rebecca Ross and Mischi a Marca of Cooley LLP acted as legal advisors for TiVo Corporation. Sarkis Jebejian and David M. Klein of Kirkland & Ellis LLP acted as legal advisors to LionTree. Alison S. Ressler of Sullivan & Cromwell LLP acted as legal advisors to Centerview Partners, LLC as financial adviser to Xperi Corporation. Computershare Trust Company, N.A acted as transfer agent to Xperi and TiVo. MacKenzie Partners, Inc. and Alliance Advisors, LLC acted as the information agents to TiVo and Xperi respectively. TiVo will pay LionTree a fee for its services which is estimated to be approximately $21.1 million, which is contingent upon the consummation of the transaction. TiVo paid LionTree $3 million in connection with LionTree's delivery of its fairness opinion, which will be credited against the fee described in the preceding sentence upon the closing of the transaction. TiVo will pay MacKenzie a fee of approximately $18,500 for the services rendered. Xperi will pay a fee of approximately $30,000 for solicitation services to Alliance Advisors. Innisfree M&A Incorporated acted as the information agent for Xperi who will pay them a fee of approximately $0.04 million for such services. Xperi has agreed to pay Centerview an aggregate fee expected to be approximately $12 million, $1.75 million of which was payable upon the rendering of Centerview's opinion and the balance of which is payable contingent upon consummation of the mergers.