US technology company Cisco has sold its video software business to London-headquartered Permira, the private equity owner of businesses such as Dr Martens and corporate finance house Duff & Phelps.
The deal value was undisclosed, but part of the business which Permira will now own includes what was formerly NDS Group. Permira sold Israel-founded NDS to Cisco in 2012 for $5bn.
Reports in the Israeli press that the business was bought today by Permira for $1bn were dismissed by sources close to the deal as being "wrong by some margin". Yet Cisco's service provider video business has reported declining revenue for the last several years, as it has battled to keep up with streaming services such as Netflix and Amazon.
“This is a unique opportunity to lead and shape the video industry during its transition with the flexibility as a private company,” said Abe Peled, the former chief executive of NDS who will now become chairman of the new company.
"Cisco has built a profitable business in the video space with innovations to capitalise on intellectual property distribution and cloud-based services."
The company, which will be rebranded under Permira's ownership, will focus on providing services to the pay-TV industry. It will include Cisco's Infinite Video Platform, which allows subscription channels to offer customers from-the-cloud streaming, cloud digital video recording, which lets customers restart live programmes, video processing, video security and other services.
Cisco will retain the video and media technology "related to its core business in networking, multi-cloud, security, data, and collaboration", such as Webex.
Bank of America Merrill Lynch acted as the financial adviser to Permira and provided debt for the deal.