Rovi is to acquire TiVo for a total of $277 million in cash and the remainder in shares in a new holding company, with Rovi shareholders retaining a majority stake. The combined company will adopt the TiVo brand name, once synonymous with the pioneering personal video recorder. Much of its future value is likely to rest in attempting to exploit its patent portfolio.

“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, the chief executive of Rovi.

“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,” said Naveen Chopra, the interim chief executive and chief finance officer of TiVo.

The combined company is forecast to have annual revenues of more than $800 million. It expects to save at least $100 million a year as a result of the merger.

Rovi and TiVo say they have invested over $1.5 billion between them in research and development over the past decade.

TiVo and Rovi have portfolios of over 6,000 patents issued and pending. They have earned more than $3 billion in licensing revenues and awards for damages.

Rovi claims it has around 137 million pay-television households worldwide using a guide under licence from the company. Although it has successfully asserted its intellectual property ownership in many cases, some of its patents have been thrown out by the courts.

The companies cited TiVo’s leadership in user experience and programme discovery, together with Rovi’s strength in guides, personalization, advertising, analytics and cloud services. The announcement did not mention the role of TiVo in pioneering the personal video recorder.

TiVo managed to win large legal settlements on its patents for timeshifting technology, bringing it significant income, but it has struggled to achieve scale.

At the end of 2015, TiVo had under a million standalone subscribers and fewer that 6 million subscriptions through service providers.

Nearly 3 million of its subscriptions are with Virgin Media in the United Kingdom and Ireland. TiVo boxes account for nearly 80% of the television customer base for Virgin Media, which is owned by Liberty Global.

Significantly, Virgin Media has long rejected attempts by Rovi to licence its claimed intellectual property in relation to programme guides, winning a number of court cases over what it described as “meritless patent claims”.

It will be interesting to see how Virgin Media responds to the new owners of TiVo, particularly since Liberty Global has invested in its own Horizon platform with other operators.

For the first three months of 2016, Rovi reported revenues of $118 million and a net loss of over $17 million.

Rovi was previously known as Macrovision until 2009, a year after it acquired Gemstar-TV Guide.

The combined company will be known as TiVo, so at least it will have a memorable domain name, since it did not manage to get one for Rovi.