NDS Agrees to Go Private

News Corp., two subsidiaries of funds advised by private-equity player Permira Advisers reach agreement to take conditional-access, interactive-TV-software provider private.

By Glen Dickson -- Broadcasting & Cable, 8/6/2008 8:13:00 AM

Conditional-access and interactive-TV-software provider NDS Group, a majority-owned subsidiary of News Corp., agreed to be taken private in a deal worth an estimated $3.7 billion.

The U.K.-based firm announced that an independent committee of its board of directors reached an agreement in principle with News Corp. and two subsidiaries of funds advised by private-equity player Permira Advisers on a deal in which News Corp. and the Permira entities would acquire all issued and outstanding NDS series-A ordinary shares, including those represented by American Depositary Shares traded on the NASDAQ Exchange, for $63 apiece in cash. That is higher than the $60 per share News Corp. and Permira offered in late June.

After the deal, NDS would cease to be a public company and the Permira entities and News Corp. would wind up owning approximately 51% and 49% of NDS, respectively.

Also Tuesday, NDS announced its full-year results for fiscal-year 2008, posting strong revenues of $850.1 million, up 20% compared with the previous year. Operating income also increased 21.8% to $195.4 million, and diluted net income per share was up 16.7% to $2.72.

NDS’ conditional-access technology is now deployed in 90.3 million active devices, while its interactive-TV “middleware” is used by 92.5 million set-tops.

“NDS completed another year with strong results on all of our key metrics, subscriber growth, middleware and DVR [digital-video-recorder] shipments, and strong performance of our Orbis subsidiary,” chairman and CEO Abe Peled said in a statement.

“Our fiscal-2008 performance benefited from continued strong execution and key new customer wins," he added. "Of particular note are our successful penetration of the German cable and satellite market and our wins in India and Malaysia. We also extended the terms of our CA contracts with our largest customers.”

Peled added that while NDS’ 2008 performance benefited overall from the continued weakness of the U.S. dollar, the company expects the “continuing strength of the Israeli shekel will make fiscal 2009 a very challenging year.”