By: Maureen O'Gara
Believing that the Internet is going to turn into one big cloud-ified television set, Cisco said Thursday that it's going to buy England's NDS Group for roughly $5 billion.
It's Cisco biggest acquisition since it bought Tandberg, the video conferencing outfit, back in 2009 for $3.4 billion, and it's meant to compensate for the lagging growth it's seeing in its core networks business.
According to a canned statement ascribed to Cisco CEO John Chambers "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 monetization opportunities and service differentiation."
NDS sells content streaming and protection software to service providers and media companies so they can deliver and monetize video entertainment. Subscribers can view, search and navigate digital content anytime, anywhere and on any device or devices.
NDS has pushed into India and China, which suits Cisco to a "T."
The acquisition is supposed to complement Cisco's like-minded Videoscape streaming platform and broaden its opportunities in the SP market.
Cisco will pay $4 billion for the company, which was taken private in 2008 by News Corp and Permira, a London-based private equity group. It'll spend another billion assuming its debt and paying retention-based incentives. The deal is expected to close during the second half and be accretive on a non-GAAP basis in its first full year.
Guess this means Cisco won't be selling its Atlantic-Scientific set-top box business as speculated.
The NDS widgetry works with set-top boxes, DVRs, PCs and mobile devices.
Over 90 of the world's pay-TV platforms rely on its stuff including British Sky Broadcasting, Canal Plus and DirecTV. Its middleware is on 214 million devices, its DRM in 125 million pay-TV households and its DVR technology on 47 million devices. Evidently NDS contracts generally run for a nice stable five years.
The operation with its 5,000 employees will become part of Cisco's Service Provider Video Technology Group (SPVTG) under general manager Jesper Andersen and NDS executive chairman Abe Peled will be chief strategist of Cisco's Video & Collaboration Group. SPVTG is part of that group. Peled will report to Marthin De Beer, head of the Video and Collaboration Group.
