Cisco Systems said on Thursday it will buy NDS, a developer of software for multi-channel television networks, for $5 billion.
Founded in Israel in 1988, NDS (London) is 51% owned by private equity fund Permira and 49% by News Corp. It maintains a large research and development center in Jerusalem.
Cisco (San Jose, Calif, USA) said it will pay about $5 billion, including the assumption of debt and retention-based incentives, to acquire all of NDS. The acquisition, which is expected to close during the second half of 2012, has been approved by the boards of both companies.
The deal's value is about 35% higher than NDS's value when it was delisted from the stock exchange in 2009.
NDS specializes in the development of interactive systems for secure delivery of entertainment and information to digital TVs, digital set-top boxes, PCs and mobile devices. It also provides electronic security systems for Web applications.
Its technology is expected to complement Cisco's Videoscape video delivery technology.
The company's flagship product is its encryption and conditional access system VideoGuard, which is installed on home TVs via smartcards integrated into set-top boxes.
NDS's products are at the heart of News Corp's technological infrastructure -- the company's coding system allows it to control the channels provided to each subscriber on multi-channel TV as well as billing.
(Reporting by Tova Cohen in Tel Aviv; and Yinka Adegoke in New York; Editing by David Holmes and Maureen Bavdek)