US multinational corporation Cisco Systems announced Thursday its intent to acquire Israeli-founded multi-channel television software developer NDS for about $5 billion.

NDS was established by a group of Weizmann Institute scientists in 1988 and is owned by European privateequity firm Permira (51 percent) and Rupert Murdoch’s News Corp. (49%). Its headquarters are situated just outside of London, but more than one-quarter of its 5,000 employees, about 1,300, work at its Jerusalem R&D center.

Several of its founding members were English-speaking immigrants, and its Jerusalem center has traditionally employed a high proportion of English speakers, many of them religious Jews.

It specializes in developing systems for protection and delivery of content to digital TVs, set-top boxes, computers and mobile devices.

Its clients include many of the world’s largest cable, satellite and broadband pay-TV operators, including BSkyB, Canal Plus, China Central Television and Vodafone.

The cost of the acquisition is almost 40% higher than NDS’s value when it was delisted from the NASDAQ in 2009. Cisco said it expects the acquisition, which has been approved by the boards of directors of both companies, to close during the second half of 2012.

Upon the completion of the transaction, NDS’s global operations, including sites in the UK, Israel, France, India and China, will join Cisco’s Video Technology Group, led by senior vice president and general manager Jesper Andersen.

Cisco said the acquisition would accelerate the delivery of Videoscape, its platform that enables service providers and media companies to deliver next-generation entertainment experiences.

NDS’s Israeli chairman Abe Peled will become a Cisco senior vice president and chief strategist for its video technology group. Business daily Calcalist reported that the negotiations over the sale set the backdrop for Peled’s retirement as CEO and shift to the position of chairman last July.

“Cisco and NDS are helping drive the transition that will enable service providers and media companies to offer new revenue-generating video experiences,” Peled said.

“NDS’s open-software video platform and services are highly complementary to Cisco technology, and together we are uniquely positioned to enable service providers to deliver fresh and exciting multi-screen video services to their customers.”

Finance Minister Yuval Steinitz said he viewed the acquisition as another statement of confidence in the future of Israeli hi-tech, following recent investments by multinational corporations Apple, Intel, Citibank, Barclays and Lenovo.

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