Cisco has long been known as a key supplier of advanced networking and video switching technology to enable the consumption of media by consumers and the sharing of content by professionals. Now it’s looking to ensure that that content is secure across the entire media landscape and that its customers can use its technology and services to monetize a wide variety of video entertainment experiences.
The company said it now wants to acquire NDS Group Ltd., a provider of video software and content security solutions. NDS uses the combination of a software platform and services to create differentiated video offerings for service providers that enable subscribers to intuitively view, search and navigate digital content anytime, anywhere and on any device.
"Our strategy has always been driven by customer need and on capturing market transition,” said John Chambers, Chairman and CEO, Cisco. “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."
Under the terms of the agreement, Cisco will pay approximately $5 billion, including the assumption of debt, to acquire all of the business and operations of NDS. The acquisition, expected to be completed by the second half of 2012 (subject to customary closing conditions), has already been approved by the boards of directors of both companies.
In a statement, Cisco said the acquisition of NDS will complement and accelerate the delivery of Videoscape, Cisco’s platform that combines digital TV and online video content with social media and communications applications as well as “video in the cloud" services, is a key part of the company's overall video strategy to deliver cloud-based networking and end-user interfaces that make access to content “more visual, mobile and social for consumers, while protecting and enhancing the value of content for service providers and media companies.”
Acquiring NDS also will broaden Cisco’s opportunities in the service provider market, expanding its reach into emerging markets, such as China and India, where NDS has an established customer footprint.
Prior to the close, Cisco and NDS will continue to operate as separate companies. Upon completion of the transaction, NDS's global operations, including 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 (SPVTG), led by Senior Vice President and General Manager Jesper Andersen.
Dr. Abe Peled, NDS’s current executive chairman, will be named senior vice president and chief strategist for Cisco’s Video & Collaboration Group, of which SPVTG is a part. Dr. Peled will report directly to Marthin De Beer, senior vice president, Cisco Video and Collaboration Group.
"Cisco and NDS are helping drive the transition that will enable service providers and media companies to offer new revenue-generating video experiences,” Peled said. “A key component of NDS's success has been our open software and services model, working with a wide range of set-top box manufacturers to enable greater choice for our customers. [Upon completion of the acquisition] this strategy will continue and expand the choice of hardware solutions available to service providers worldwide.”