Cisco Buys NDS Group In $5 Billion M&A Blockbuster

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 purse, Cisco's largest acquisition since its $6.9 billion buy of Scientific-Atlanta in 2005.

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.

[Related: 10 Past Cisco Acquisitions Considered ]

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. Based in Staines, U.K, NDS was established in 1988, was acquired by its top customer, News Corp., in 1992, was spun-off as a public company in 1999, and was taken private by an investor group led by Permira in late 2009. In December 2011, NDS filed with the U.S. Securities And Exchange Commission for an intended initial public offering (IPO), worth up to $100 million.

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 U.K., 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 Peied'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 monetization opportunities and service differentiation," John Chambers, Cisco's Chairman and CEO, said in a statement.

Cisco in February said it would acquire Lightwire, a specialist in advanced optical interconnect technology designed for high-speed networking uses. Chambers, during Cisco's second quarter earnings call, said Cisco would once again pick up the M&A pace this year following a period of curtailed acquisition activity while Cisco restructured in 2011.