Cisco pays $5B for NDS Group

Cisco (Nasdaq: CSCO) has reached a deal to acquire pay-TV software maker NDS Group Holdings, confirming earlier rumors from an Israeli newspaper. Cisco will pay approximately $5 billion, including the assumption of debt and retention-based incentives, to acquire all of the business and operations of NDS.

NDS is a provider of video software and content security solutions for pay-TV operators and supports TV everywhere and over-the-top initiatives. It currently counts  DirecTV (Nasdaq: DTV), British Sky Broadcasting Corp., Canal Plus and other pay-TV operators among its customers.

Cisco said the deal will accelerate its delivery of Videoscape, its platform designed to enable service providers to deliver next-generation entertainment experiences. NDS already has a solid customer footprint in emerging markets like China and India, which will help Cisco broadens its own reach with service providers there.

"Our strategy has always been driven by customer need and on capturing market transitions," said Cisco Chief Executive John Chambers. "Our acquisition of NDS fits squarely into this strategy, enabling content and service providers to deliver new video solutions that leverage the cloud and drive new monetization opportunities and service differentiation."

Cisco has made a number of recent acquisitions in recent months to support Videoscape, among them Inlet Technologies and BNI Video. The NDS deal, Cisco said, will address issues including end-user viewing client and content security solutions. NDS also brings a significant amount of systems integration expertise to the table. All, said Cisco, will accelerate the delivery of Videoscape.

Billionaire Rupert Murdoch's News Corp. (Nasdaq: NWSA) and London hedge fund Permira Advisers LLP are co-owners of the company, which in December filed for an IPO that sought to raise up to $100 million.

The acquisition has been approved by the boards of directors of both companies and is expected to close in the second half of this year. For now, Cisco and NDS will operate as separate companies. When the transaction closes, NDS' sites in the United Kingdom, Israel, France, India and China, and its approximately 5,000 employees will join the Cisco Service Provider Video Technology Group. NDS Executive Chairman Dr. Abe Peled, will become SVP and chief strategist for Cisco's Video & Collaboration Group, of which SPVTG is a part.

For more:
- see this release
- see this Bloomberg report

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