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Cisco to spend $5 billion for set-top box software maker

Cisco is on the acquisition hunt again as it buys NDS, a video software delivery provider. Cisco hopes NDS will help it tap into emerging markets.

Cisco Systems has signed a $5 billion deal to buy set-top box software developer NDS, the companies said today.

NDS, based in the U.K., sells its software platform along with a combined service platform to video service providers. The products allow video providers to deliver a service that easily lets people view, search, and navigate video content at anytime from anywhere.

Cisco plans to use NDS software and services to enhance development of Videoscape, its own video platform for paid TV providers. The company said the NDS acquisition should help it expand into emerging markets, such as China and India, where NDS already has a strong presence. Cisco got into the video set-top business in 2006 when it bought Scientific Atlanta for about $6.9 billion.

Under the terms of the deal, Cisco will assume about $1 billion of NDS debt. NDS employs more than 5,000 people and is owned by News Corp. and private equity firm Permira.

Cisco expects to close the deal in the second half of the year.