The News-Permira offer valued NDS at $3.6 billion. The bid was $60 per share, a 21% premium over NDS’ closing price of $49.70 Friday, although News and Permira said that with adjustments, it’s a few percentage points higher.
Taking NDS private increases operating flexibility and makes it easier to extract excess cash from the company, which is doing well. Based in the United Kingdom, NDS generates $835 million in annual revenue and solid profits.
News Corp. will own 49% after the buyout, down from 72% of equity now and 96% voting. Friday’s buyout bid is aimed at taking out the 28% of public shareholders who would receive $960 million.
In the buyout, Permira would become 51% owner. It is active in European media as an investor in large German broadcaster ProSiebenSat.1 Media and TV producer All3Media.
The NDS board formed a special committee to evaluate the $60-per-share offer. The 21% percentage is a bit lower than the average difference between the offer and pre-offer trading price.
In a statement, News Corp. said the deal is a way for NDS public shareholders to cash out of an "illiquid investment at an attractive price.” The buyout is conditioned on receiving various approvals.
Friday’s deal was fully negotiated and Permira completed its due diligence. The equity financing for the transaction will be provided by funds advised by Permira, and the debt financing comes from Wall Street investment houses JP Morgan and Morgan Stanley.