Building better businesses - Permira

Investment
overview
NDS Group (‘NDS’) creates technologies and
applications that enable pay-TV operators, telcos and
mobile operators to deliver digital content securely to TV
set-top boxes, digital video recorders (‘DVRs’), personal
computers, mobile phones and other multimedia
devices. Over 70 of the world’s leading pay-TV platforms
rely on NDS solutions to protect and enhance their
businesses. In August 2008, the Permira funds agreed
to acquire NDS in a public-to-private transaction.
The acquisition of NDS was carried out in partnership
with News Corporation, which maintains a significant
interest in the business.
NDS offers solutions for satellite, cable,
internet protocol television (‘IPTV’), terrestrial
and mobile networks as well as hybrid
systems which combine broadcast and
internet technology. NDS has strong
relationships with key customers including
DIRECTV, BSkyB, Sky Italia, Viasat, Sky
Deutschland, CANAL+, Astro, Tata Sky,
CCTV and Cox Communications.
NDS VideoGuard ® is the world’s leading
conditional access and digital rights
management technology. It is deployed
on more than 119 million active devices.
VideoGuard protects the operators’ service
as well as their content. It safeguards pay-TV
service revenues exceeding US$40 billion.
NDS middleware is deployed in 143 million
TV set-top boxes, enabling a host of
advanced services for subscribers including
EPGs (Electronic Program Guides),
interactive applications and convergence
solutions. NDS’s DVR technology leads
the industry with 28 million units
deployed worldwide.
Despite the adverse economic environment
in 2009, the pay-TV industry has been resilient
and most NDS clients have continued to
grow and roll out new services. NDS has
experienced solid volume growth in FY June
2009, offset by adverse foreign exchange
effects. In addition, FY 2008 sales benefited
from one-off items that were not repeated
in FY 2009. Profitability and cash flow
generation remained strong, reducing
the leverage multiple materially.
In FY 2009, NDS added a number of new
customers including KDG (the largest
German cable operator), Vodafone Europe
and ZON (the largest Portuguese cable
operator). It also expanded the scope of its
products and services range.
In 2010, the NDS management team
will continue to grow the business by
strengthening existing client relationships
while targeting new applications and
services, and seeking out further growth
opportunities in emerging markets and in the
cable, IPTV and other market segments.
In 2010, NDS is projecting solid revenue
growth along with an improvement in
profitability. Growth will be driven by
existing clients, especially in emerging
countries; growth in new customers and
the development of business in the US cable
market. There are many opportunities for
new customer/business wins in NDS’s core
pay-TV market. NDS has been expanding its
workforce globally with a particular focus
on the US, China and India. NDS will also
continue to investigate new areas of growth
outside its core pay-TV market, especially in
internet video.
Permira Annual Review 2009 Our Portfolio 63