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Cisco is selling its NDS video business at what is believed to be a huge loss.
Cisco is selling the NDS Group video software unit it acquired six years ago back to Permira for an undisclosed sum.
Industry reports suggest that the sum is less than $1bn.
Cisco acquired the Israeli tech company in 2012 from private equity firm Permira, which owned 51pc of the company at the time, for around $5bn.
That unit became Cisco’s Service Provider Video Software Solution business.
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It is understood that Permira plans to launch a newly rebranded company focused on delivering video solutions for the pay-TV industry.
The new business will be built around Cisco’s Infinite Video Platform, including cloud digital video recording, video security, video middleware and professional services.
Video industry leader Dr Abe Peled, former chair and CEO of NDS and adviser to Permira Funds, will serve as chair of the new company.
“The new company will have the scale, technology innovation and world-class team to deliver outstanding go-to-market execution, customer engagement and new end-user experiences,” Peled said.
“Cisco has built a profitable business in the video space with innovations to capitalise on IP distribution and cloud-based services. These combined assets provide a significant new opportunity for the new company.”
It is understood that Cisco will retain the video and media technology related to its core business in networking, multi-cloud, security, data and collaboration.
“We are proud of our innovation in video and the customer momentum that the Service Provider Video group has built,” said Chuck Robbins, chair and CEO of Cisco.
“With the leadership team and Abe as chair, the new company is well positioned to drive this work forward and continue to deliver the solutions that meet the current and future needs of Service Provider Video customers.
“Service providers remain a key customer segment for Cisco, and we look forward to continuing to partner with them to deliver new revenue-generating services and experiences,” said Robbins.
