Former Israeli company NDS, which operates a large R&D center in Jerusalem, is in advanced acquisition talks with information technology giant Cisco, Calcalist reported Thursday.
The company, which develops software solutions for multi-channel television networks and is owned by the Premira fund and News Corp, is expected to finalize the sale within days in a mega-deal estimated at $5 billion.
NDS was founded in 1988 in Jerusalem by a group of scientists from the Weizmann Institute of Science. The company specializes in the development of interactive systems for secure delivery of entertainment and information to digital TVs, digital set-top boxes, PCs and mobile devices. NDS also provides electronic security solutions for web applications.
Talks between Cisco and Premira, which owns 51% of NDS, and the News Corp group, which is controlled by Rupert Murdoch and owns 49% of the company, are in their final stages. The deal’s estimated value is about 35% higher than NDS’s value when it was delisted from the stock exchange in 2009.
Magnet for foreign investors
The company’s flagship product is its encryption and conditional access system, VideoGuard, which is installed on home TVs via smartcards integrated into set-top boxes.
NDS’s solutions have been a magnet for foreign investors from its inception. In 1992, four years after it was founded, the company had its first moment of glory when it was acquired by News Corp for $15 million. In 1999, NDS achieved another milestone when Murdoch listed the company on NASDAQ.
Ten years later, the picture changed once again for the former Israeli company when the European Premira partnered with New Corp and the two acquired all of NDS’s outstanding shares for $3.7 billion. Following the move, NDS was delisted from NASDAQ.
In recent months, NDS’s owners made headlines for very different reasons. News Corp found itself in the epicenter of a phone hacking scandal, which resulted in the shutting down of the News of the World tabloid. Murdoch himself, who has become the target of worldwide criticism, was forced to testify before a British parliamentary committee.
Premira made headlines in Israel under completely different circumstance, namely a series of acquisitions and negotiations involving several Israeli companies. Recently, the private equity fund acquired a controlling interest in irrigation solutions company Netafim for $850 million.
NDS itself had recently made headlines in Israel following media reports that the company submitted its initial public offering prospectus to NYSE in the aim of raising $100 million. According to reports, the offering will be led by Morgan Stanley, J. P. Morgan and Goldman Sachs, which are believed to be underwriting the present acquisition deal as well, with J.P. Morgan as lead underwriter.
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