Rovi Acquiring Sonic Solutions

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Rovi Corp. is moving into the digital video streaming business. Best known for its interactive television guides found on cable and satellite systems, Rovi also offers content protection and content networking technology and, according to Business Insider, is now set to pay $720 million in cash and stock for digital video company Sonic Solutions, Inc.

Buying Sonic Solutions will give Rovi RoxioNow, an online catalog of over 10,000 movie and TV shows, along with the popular digital video player software DivX, which has been distributed on over 350 million devices. Rovi will also acquire DivX TV, which lets users play downloaded internet content on their TVs.

Basically, this deal gives Rovi a tremendous amount of digital content along with methods of distribution. While Rovi, unlike Netflix, isn’t in the distribution business itself, it wants to partner with companies who are–Blockbuster for example–thus becoming an alternative channel for video streaming.

The agreement calls for Rovi to pay $14.12 per share for Sonic’s stock, which is about 38% more than the average stock price for the last 30 days. The acquistion is expected to close in the first quarter of 2011.