Conglom should see $1 billion from transaction with Cisco

News Corp. and private equity firm Permira are selling NDS Group to Cisco Systems for $5 billion, the computer giant announced Thursday, in a move one analyst estimated would result in a $1 billion gain for Rupert Murdoch’s media conglom.

The sale is in keeping with COO Chase Carey’s goal, stated often in recent months, to move News Corp. out of nonstrategic businesses or those that it doesn’t fully control. News Corp. owns 49% of NDS.

London-based NDS is a leading provider of video and content security software for pay TV operators to deliver content to subscribers. More than a third of digital pay subs worldwide use NDS, which serves BSkyB, DirecTV, Vodafone and other operators.

Sanford Bernstein analyst Todd Juenger called the move a positive for News Corp. and said the gain could be even greater than $1 billion if the company is able to offset an expected tax burden with tax credits or doesn’t repatriate the proceeds. Deal adds to News Corp.’s already-hefty pile of cash since it pulled its bid to acquire the rest of BSkyB last summer.

News Corp. stock was up 1.08% at $20.50.

News Corp. acquired NDS in 1992 and spun it off a few years later into a separate public company. In 2009, News and Permira bought out the public holding for $3.6 billion.

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