Cisco Systems Inc. signed a deal to acquire video security company NDS Ltd. for roughly US$5 billion, the companies confirmed Thursday morning.
Based in Israel, NDS makes security and conditional-access software for video networks. To Cisco, that means a fresh approach to features such as video search and navigation.
NDS also offers a downloadable version of its encryption system, something that could help Cisco's set-top business (which the company still denies it's trying to sell).
Cisco expects to close the deal in the second half of 2012.
Why this matters
Cisco continues to bet its future on video. NDS gives the company a way to deepen relationships with the service providers that want to spread video to various consumer and mobile devices, according to a Thursday morning blog posting by Senior Vice President Marthin De Beer.
NDS also has some sizable customers in China and India, so the deal brings Cisco more deeply into those markets.
On a political note, Cisco has been not-so-subtly threatening that its acquisitions will favor overseas deals. It's a way of indirectly pressuring the U.S. government to offer a tax break on repatriation of international profits. You can bet Cisco is going to emphasize the fact that its largest acquisition in years happened overseas.
More info on Cisco's video aspirations:
â€” Craig Matsumoto, Managing Editor, Light Reading