Permira, News Corp in $3.7bn take-private

The management of set-top box technology company NDS has agreed to a take-private deal with media giant News Corp and UK-based buyout firm Permira. The private equity firm will own 51 percent of the company, with Rupert Murdoch’s media group owning the remainder.

Global buyout house Permira is joining forces with Rupert Murdoch’s News Corporation to take Nasdaq-traded NDS Group off the market at $63 (€42) cash per share.
NDS develops software for television set-top boxes and is used in many of News Corp devices, including those used by customers of European satellite television provider BSkyB.
News Corp currently owns 72 percent of NDS, but will effectively sell just under a third to of its shares to Permira for a cash consideration of $1.52 billion, in addition to a $242 million vendor loan note.

The current ownership structure was imposing certain limitations

Abe Peled

Abe Peled, chairman and chief executive officer of NDS said in a statement that the deal would facilitate NDS’ further global expansion.
“NDS needs to have the strategic agility and flexibility to enter into any type of value enhancing transactions. The current ownership structure was imposing certain limitations,” he said.
Expected to close at the end of 2008 or in early 2009, the deal uses a scheme of arrangement, or a court-ordered reorganisation of the company’s shares ownership.
When News Corp first announced its intentions to take NDS private in late June, the original offer of $60 a share represented a 21 percent premium to the $49.7 share price. The stock price has since traded between $60 and $61.
The technology, media and telecoms sector is one of four key areas for Permira, and as of the beginning of this year made up 26 percent of the firm’s portfolio. In May, the firm boosted its TMT credentials with the hire of Riccardo Ruggiero, former chief executive of Telecom Italia.
Permira has 11 offices worldwide and approximately €22 billion ($34.5 billion) in total committed capital.