Cisco purchases NDS for $5bn

Cisco Systems has reached a $5bn (£3.2bn) deal today to buy British digital video firm NDS, currently owned by a private equity firm Permira and News Corp.

NDS offers technology used in BSkyB in its set-top box software, and would be one of Cisco’s biggest acquisitions. The purchase price of NDS was 35 per cent higher than its value when it was delisted from Nasdaq in 2009.

Cisco agreed to pay $5bn, including the assumption of debt and retention-based incentives, to acquire all of NDS, which has less than $1bn in total liabilities.

“NDS’s customer portfolio will broaden Cisco’s presence into new segments of the service provider market,” Marthin de Beer, Cisco’s senior vice president of video, said in a blog.

The boards of both Cisco and NDS have approved the acquisition, and the merger will likely close in the second half of the year. Cisco shares were down 1.5 per cent following the news.