Rovi To Buy Sonic Solutions, Forming New Force In Digital Distribution

Rovi Corp. declared its intent to acquire Sonic Solutions late Wednesday in a deal worth $720 million. The combined company could have the clout to accelerate the adoption of digital distribution in video entertainment.

The deal marries Rovi’s strengths in content metadata and electronic programming guides with the broad footprint Sonic has established in providing an infrastructure for selling movies and TV shows across a range of devices.

Sonic services the Hollywood studios with RoxioNow, a branded service that makes premium programming available to consumers for purchase via digital storefronts operated by companies including Best Buy and Blockbuster (NYSE: BBI). Earlier this year, Sonic itself acquired DivX (NSDQ: DIVX), a video format accessible to 300 million devices worldwide. Sonic will give Rovi the opportunity to extend its TotalGuide platform and advance its interests in extending advertising opportunities.

The acquisition is expected to close in the first quarter of 2011.