On Friday, Rupert Murdoch’s News Corp. said it was working with private equity firm Permira to take NDS Group private.
The deal for publicly traded NDS, which is already majority-owned by News Corp., would result in Permira and News Corp. owning 51 percent and 49 percent, respectively, of NDS.
Terms of the complex deal included:
- All issued NDS Series A ordinary shares, including shares represented by American Depositary Shares (ADS) traded on NASDAQ, would be cancelled for per share consideration of $60 in cash.
- Approximately 68 percent of the Series B ordinary shares held by News Corp. would be cancelled in exchange for $60 per share in a mix of cash of approximately $1.5 billion and a $200 million vendor note. News Corp. currently owns approximately 72 percent of the equity and 96 percent of the voting power of NDS through its ownership of 100 percent of the outstanding Series B shares. News Corp. will retain ownership of the remaining 32 percent of the Series B ordinary shares it currently holds, resulting in it owning 49 percent of NDS pro forma for this transaction.
- NDS would issue new Series B ordinary shares to the Permira Newcos, representing 51 percent of its equity pro forma for this transaction.
- The equity financing for the transaction will be provided by funds advised by Permira, and JP Morgan and Morgan Stanley will provide the debt financing.
The proposed consideration of $60 per share to be paid to all holders of NDS Series A shares, and to News Corp. for the sale of its NDS Series B shares, represents a premium of 20.7 percent compared with the ADS closing price of $49.70 per share on Friday.
“The transaction has been fully negotiated between News Corporation, Permira and NDS management,” News Corp. said. “Permira has completed its due diligence, and all of the third-party financing is in place.”
Last month, NDS announced a significant customer win in the U.S. with Cox Communications (story here). Cox announced that it was working with NDS to design a new set-top box interface that will allow Cox’s digital customers to access all of their digital TV services through a single, interactive user interface (UI).
Cox, the nation’s third-largest cable operator, has designed an interactive UI for existing and new set-top boxes that it said will be deployed widely sometime next year. The NDS interface will start out on Cox’s OnRamp deployments, with the goal of moving it over to tru2way once Cox’s network is ready.
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