US communications technology company Cisco has acquired London-based conditional access firm NDS. First announced in March, the transaction required regulatory clearance. Under the terms of the deal, Cisco paid approximately US$5bn, including the…
US communications technology company Cisco has acquired London-based conditional access firm NDS. First announced in March, the transaction required regulatory clearance.
Under the terms of the deal, Cisco paid approximately US$5bn, including the repayment of debt and retention-based incentives. The deal was mainly financed through cash from overseas subsidiaries for tax purposes.
NDS was sold by private equity firm Permira, which held a 51% stake, and media giant News Corp, which controlled the remaining 49% share.
Cisco had stated, a few months ago, that the acquisition of NDS is broadly in line with the EBITDA multiples paid when the target was delisted in 2009 by Permira and News Corp under a US$1.5bn deal. It added that it is also within the multiple ranges for comparable transactions, including its US$3.4bn deal to acquire video conferencing firm Tandberg in 2009.
According to Cisco, NDS will bolster the offering of its video delivery platform, and will also increase its reach into potentially lucrative emerging markets, such as China and India.
Commenting on the transaction on 31 July, Jesper Andersen, general manager of Cisco’s Service Provider VideoTechnology Group (SPVTG), said: “The addition of NDS’ leading software solutions and systems integration expertise play a key role in accelerating the Cisco Videoscape platform aimed at delivering better-than-being-there entertainment experiences.
“Through our combined expertise, we look forward to providing the next-generation TV experience that is more immersive, engaging and social, while helping to create new revenue opportunities for our service provider customers.”
Now that the deal has closed, NDS’ global operations, which include sites in the UK, Israel, France, India and China, come under the SPVTG umbrella.
Abe Peled, formerly NDS chairman and CEO, becomes chief strategist for Cisco’s Video and Collaboration Group, of which SPVTG is part.
Before the acquisition, NDS had been gearing up to raise US$100m in an IPO on the New York Stock Exchange to refinance debt and distribute cash to its shareholders.
For its acquisition of NDS, Cisco was advised by JPMorgan Chase and Centerview Partners. NDS was advised by Skadden, Arps, Slate, Meagher & Flom. It is understood separate advisers were not appointed for News Corp or Permira.
