SANTA CLARA, California ( TheStreet) -- Rovi ( ROVI) agreed to buy Sonic Solutions ( SNIC) for $720 million in a stock and cash transaction to broaden its digital entertainment offerings. Under the deal, shares of Sonic Solutions are valued at $14.17 a share, a 38.2% premium to Sonic's 30-day average per share closing price as of Tuesday. Sonic Solutions closed Wednesday at $11.22. Sonic Solutions owns RoxioNow, a cloud-based digital media delivery infrastructure, and DivX, digital video player software. "Rovi and Sonic share a vision for the future of digital entertainment and how to deliver the best consumer experience possible," said Fred Amoroso, Rovi CEO and president, in a statement. "We believe Sonic has built an exciting portfolio that complements Rovi's TotalGuide as well as our broad portfolio of solutions." Sonic Solutions shareholders may elect to receive either $14 or 0.2489 a share of Rovi. Cash consideration in the offer will be equal to 55%. Rovi said it intends to begin an exchange offer for Sonic Solutions shares in January. The exchange offer is expected to close in the first quarter of 2011. Rovi said the acquisition would add 5 cents to 10 cents a share to its 2011 adjusted earnings. -- Written by Joseph Woelfel >To contact the writer of this article, click here: Joseph Woelfel >To submit a news tip, send an email to: firstname.lastname@example.org.