Roku (ROKU) M&A announcement summary

Deal rationale and strategic fit

• Combines a leader in live news and sports with a top connected TV platform, expanding reach to over 100 million streaming households and more than half of all U.S. broadband households.

• Positions the company in high-growth segments like streaming, connected TV advertising, and AVOD, leveraging premium content and advanced technology.

• Accelerates advertising capabilities, cross-promotion, and digital transformation, enhancing long-term growth and profitability.

• Both companies share a culture of innovation and entrepreneurial mindset, expected to drive efficient integration and future growth.

• Maintains shareholder capital return programs and investment grade rating.

Financial terms and conditions

• Acquisition valued at $160 per Roku share, with 60% ($15 billion) in cash and 40% in Fox Class A common stock (approx. 152 million shares), totaling $25 billion equity value and $22 billion enterprise value.

• Each Roku share receives $96 in cash and 0.9693 Fox Class A shares, with the stock portion valued at $64 per share.

• Fox shareholders will own about 73% and Roku shareholders about 27% of the combined company.

• Cash funded by $8 billion in new debt, $9 billion in pro forma combined cash at close, and $12 billion in committed bridge financing.

• Pro forma net leverage at closing expected to be 2.8x trailing 12-month EBITDA, including 50% credit for run-rate cost synergies.

Synergies and expected cost savings

• Approximately $400 million in run-rate cost synergies identified, with additional revenue upside expected.

• Revenue synergies anticipated from enhanced advertising, cross-promotion, and leveraging first-party data.

• Combined digital platforms projected to generate about 30% of total revenue on a pro forma basis.

• Transaction is projected to be accretive to free cash flow per share by the second full year after closing.