Durham, N.C.-based Digitalsmiths' cloud-based software allows users to search content and generates personalized recommendations on mobile and gaming consoles.
The company does business with seven of the top 10 television service providers in the U.S., including Time Warner Cable (TWC) , Dish Network (DISH) , and DirecTV (DTV) , reaching a total of 64 million U.S. homes. Though only about 10% of those customers use Digitalsmiths' services, the company said it expects the number to rise to about 50% over the next several years.
"Digitalsmiths contributes expertise, data opportunities and approaches that complement and extend TiVo's extensive work in advanced television to customers seeking search, recommendations and portability," said TiVo CEO Tom Rogers in a statement.
TiVo CFO Naveen Chopra added in a phone interview that TiVo has been working to transform itself from a direct consumer company to a software provider to other cable companies. He said TiVo will fund the acquisition with cash from its balance sheet.
Chopra declined to say if Digitalsmiths ran an auction process.
The target, founded in 1998, has venture capital backing from 406 Ventures, Aurora Funds, Chrysalis Ventures, Cisco Systems (CSCO) and Technicolor Holdings.
TiVo was one of the first companies to introduce digital video recorders, or DVRs. The company faces steep competition from cable companies that provide their own DVR service, as well as Apple (AAPL) AppleTV and Google's (GOOG) Chromecast.