News Corp. gets big cash haul from NDS sale


News CorporationThe $5 billion purchase of NDS Group by Cisco Systems is making headlines in the tech world. Little noticed is that News Corporation is making a big return on its investment in NDS – for the second time.

It was back in 2009 that RBR-TVBR reported on NDS being taken private, with Permira Advisors, a private equity company, acquiring 51% as the company was taken private. The public shareholders were bought out at $63 per share. News Corp. received about one and three quarter billion bucks in cash and a note as its equity stake was reduced from 72% to 49%. Not a bad return on a $15 million investment 17 years earlier. But now there’s even more.

Cisco’s deal includes about $1 billion in debt assumption, so Permira and News Corp. will each be paid about $2 billion in cash at closing.

NDS Group Ltd. creates technologies and applications that enable pay-TV operators to securely deliver digital content to TV STBs (set-top boxes), DVRs (digital video recorders), PCs, mobiles and other multimedia devices. The company says over 90 of the world’s leading pay-TV platforms rely on NDS solutions to protect and enhance their business.

NDS’ VideoGuard claims to be the world’s market-leading content and service protection solution, deployed in 125 million pay-TV households. VideoGuard conditional access (CA) and digital rights management (DRM) technologies safeguard pay-TV service revenues exceeding $50 billion. NDS middleware, which enables a host of advanced services for subscribers, has been deployed on 214 million devices. NDS DVR technology, centered around XTV, is a leader in the global industry with 47 million units deployed. (Deployment figures as of 31st December 2011).

NDS started operations in Israel, but is now headquartered in the UK. It has over 5,000 employees worldwide.

RBR-TVBR observation: Sort of makes up for the MySpace debacle, doesn’t it? The lesson is that you have to take big risks for big returns.