Rovi is acquiring DVR pioneer TiVo for about $1.1 billion in cash and stock, bringing together two entertainment-tech companies with sizable patent portfolios.

The company will continue to be led by Rovi CEO Tom Carson, but following the closing of the deal it will adopt TiVo as the new company name.

The acquisition will merge TiVo — which has shifted its business to selling software and hardware to pay-TV operators, away from retail sales of DVRs — with Rovi, a supplier of interactive program guides, entertainment metadata and related products to cable and satellite operators, consumer-electronics makers, media and entertainment firms, and Internet companies.

TiVo has acquired broad name recognition, launching one of the world’s first digital video recorders in 1999. But it has struggled to grow beyond a relatively small base of TiVo fans, as cable and satellite companies rolled their own DVRs to customers. TiVo also hasn’t fully harnessed the shift to over-the-top video streaming, outflanked by cheaper devices from Roku, Apple and Google.

“The combined capabilities of TiVo and Rovi place us in a tremendous position to extend services across platforms and to a customer base that includes traditional, over-the-top and emerging players across the globe,” Carson said in a statement. “By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders.”

“This transaction is the culmination of those efforts and the logical next step for TiVo,” said Naveen Chopra, interim CEO and CFO of TiVo. “In joining forces with Rovi, our customers, employees and stockholders will benefit from being part of a more diversified industry leader with significantly greater market opportunities.”

The companies plan to integrate TiVo and Rovi solutions, including pooling their data analytics operations, to deliver enhanced products catering to service providers, advertisers and media companies. The combo also will strengthen the new entity’s “collective position as a leading provider of intellectual property in media and entertainment discovery,” the companies said in announcing the pact.

Rovi has agreed to buy TiVo for $10.70 per share, a 13.6% premium over TiVo’s $9.42 per share closing price Thursday. However, Rovi noted the offer is 40% over TiVo’s closing price of $7.66 on March 23, prior to a New York Times report that the companies were in talks on a deal.

Together, Rovi and TiVo on a pro-forma basis project they will have more than $800 million in revenue for the full year 2016, after purchase accounting adjustments. The combined company is expected to have at least $100 million in cost synergies per year, with 65% of those recognized in the first 12 months.

Patents are a big part of both companies’ business and legal strategies: They’ve pulled in more than $3 billion in intellectual-property licensing revenue and past damage awards from lawsuits. The companies have worldwide portfolios of over 6,000 issued patents and pending applications worldwide. Rovi, dating back to predecessor company Gemstar-TV Guide International, has aggressively pursued licensing deals and litigation for its patents, as has TiVo, whose holdings include key patents related to DVR functions.

TiVo and Rovi have close to 500 service-provider customers worldwide. More than 10 million households use TiVo DVRs or services, and Rovi says about 18 million households worldwide use its interactive TV guides.

The boards of both companies have approved the deal, which is subject to usual closing conditions including approval by regulators and TiVo and Rovi stockholders. The companies expect the transaction to close in the third quarter of 2016. The board of the combined company will include participation from TiVo’s current board.

Rovi had about 1,100 employees at the end of 2015. TiVo, as of March 11, 2016, had 724 full-time employees. The companies are expected to reduce their combined workforce after the deal closes. In January, TiVo CEO Tom Rogers exited the post after nearly 11 years while continuing on as non-executive chairman. TiVo named Chopra interim chief executive officer effective Jan. 30.

After the deal was announced Friday, TiVo’s stock jumped about 6%, trading at close to $10 per share in mid-morning. Rovi shares opened up 11%, but declined by midday to $16.78, down 3.3% from Thursday’s closing price, amid a broader market decline.

Also Friday, Rovi reported first-quarter 2016 revenue of $118.4 million, down 12% year over year, and a net loss of $17.7 million versus a $15.5 million net loss in Q1 2015. Earlier this month, the company sued Comcast alleging patent infringement, after Rovi failed to renew a licensing agreement with the cable giant.

Under terms of the acquisition, Rovi will pay $2.75 per share in cash, or approximately $277 million. The remaining $7.95 per share will be paid to TiVo shareholders in shares of common stock of a new holding company that will own both Rovi and TiVo; the number of shares to be issued to TiVo stockholders will be based on Rovi stock’s average volume-weighted price over the 15 trading days ending on the third trading day prior to close of the deal.