Entertainment company Rovi announced that it will acquire DVR maker TiVo in a deal worth $1.1 billion. Rovi will pay for the deal mostly in stock at $10.70 per share, with approximately $277 million to be paid in cash at $2.75 per share. Rovi's CEO Tom Carson will continue to run the company, although it will now assume the "iconic TiVo brand" as its name.

The deal seems to be centered on patents. According to The New York Times, Rovi's interactive TV program guides account for less than half of its $526 million revenue last year, while the rest is made up of its licensed intellectual property. TiVo made a name for itself with its DVR technology, but the patents that make its DVR hardware and software work are proving to be more valuable. Together, Rovi and TiVo have over 6,000 patents issued and pending in the digital entertainment space.

Rovi expects to close the acquisition in the third quarter of this year.

"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,” Carson said in a statement. “It’s an exciting time as the media and entertainment landscape undergoes a significant evolution.... By working together, Rovi and TiVo will revolutionize how consumers experience media and entertainment and at the same time build value for our stockholders."

TiVo and Rovi have been in the news lately for very different reasons. TiVo has historically focused on hardware, recently releasing the TiVo Bolt, a set-top DVR that offers 4K streaming from the likes of Netlfix and YouTube. But the change in viewing habits from live and time-shifted TV to streaming has proven challenging for TiVo. Rovi's entertainment guides make up less than half of its revenue, but the company is very protective of them. Rovi has filed numerous lawsuits against Internet TV services such as Amazon, Hulu, and Netflix over their creation of their own guides rather than using Rovi's content. While Hulu settled, Amazon and Netflix ultimately won against Rovi.