NDS is used by multiple communications companies, and they are owned by private equity firm Permira and News Corp. Cisco agreed to the $5 billion purchase, including the assumption of debt and retention-based incentives, of NDS, which has less than $1 billion in liabilities, according to Cisco CEO John Chambers. The boards of both companies have approved the acquisition, and it is planned to close in the latter half of 2012.
ISI analyst Brian Marshall said, "While we view the price as rich for a company growing sales less than 10 percent year on year, we believe it addresses a large opportunity in enabling service providers to offer comprehensive digital media and integrated video offerings." He disagrees, though, with Cisco's claim that the acquisition will add to earnings per share in the first year, but says that it is possible with job cuts. Chambers said that the claim was due to NDS' "double-digit growth and recurring revenue stream."
Business section: Investing ideas
Cisco's acquisition of NDS is one confirmation in a sea of many takeover rumors. The list below contains tech names that have been floating around the takeover rumor mill that have also seen net insider buying over the last six months, indicating insiders at these companies expect their employers to outperform. Do you think they're likely takeover targets?
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
2. Cirrus Logic
3. Entegris: Develops, manufactures, and supplies products and materials used in processing and manufacturing in the semiconductor and other high-technology industries worldwide. Market cap at $1.29B. Over the last six months, insiders were net buyers of 146,710 shares, which represents about 0.13% of the company's 110.22M share float.
5. Leap Wireless International
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Danny Guttridge does not own any of the shares mentioned above.