Cisco announces intent to acquire NDS

Cisco to buy NDS Group in $5 billion deal

Tags: Cisco Systems IncorporatedMergers and acquisitions
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Cisco announces intent to acquire NDS Chambers says Cisco's strategy has always been driven by customer need and on capturing market transitions.
By  Manda Banda Published  March 21, 2012

Networking major Cisco has said it will acquire UK-based NDS Group, a video software and content security company specialising in how service providers and media companies deliver video content, for a whopping $5 billion.

It's the latest in a streak of acquisitions made by Cisco addressing service delivery of rich media, Cisco's second confirmed acquisition of 2012, and, at that price, Cisco's largest acquisition since its $6.9 billion buy of Scientific-Atlanta seven years ago.

According to Cisco, NDS uses a software platform and various services to enable subscribers to view, search and navigate digital content from various devices at any location.

Cisco will leverage NDS' technologies in Videoscape, its home entertainment platform for service providers that it said at his year's Consumer Electronics Show was still a top priority for the company.

Two of Cisco's most recent acquisitions, BNI Video in October 2011 and Inlet in February 2011, also concerned bolstering Videoscape, though the intended $5 billion for NDS, which includes the assumption of debt and carries retention-based incentives, according to Cisco, dwarfs the purchase prices of both.

Cisco expects the acquisition to close in the second half of calendar 2012.

Prior to the acquisition's close, Cisco and NDS will operate as separate companies, and then after the close, NDS' global operations, including offices in the UK, Israel, France, India and China, and about 5,000 employees, will become part of Cisco's Service Provider Video Technology Group (SPVTG), run by Jesper Andersen, senior vice president and general manager.

Cisco added that NDS executive chairman Dr. Abe Peled will become senior vice president and chief strategist for Cisco's Video & Collaboration Group, of which SPVTG is a part. Marthin De Beer, Cisco senior vice president, heads that group and will be Peled's new manager.

"Our strategy has always been driven by customer need and on capturing market transitions. 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 monetisation opportunities and service differentiation," John Chambers, Cisco's chairman and CEO, said in a statement.

"Cisco and NDS are helping drive the transition that will enable service providers and media companies to offer new revenue-generating video experiences. NDS's open software video platform and services are highly complementary to Cisco technology, and together we are uniquely positioned to enable service providers to deliver fresh and exciting multi-screen video services to their customers," said Peled.

He added that a key component of NDS's success has been its open software and services model, working with a wide range of set-top box manufacturers to enable greater choice for customer. Peled said following this acquisition this strategy will continue and expand the choice of hardware solutions available to service providers worldwide.

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