NDS Group has been sold by New Corp and Permira to Cisco for £3.1bn ($5bn).
NDS provides the technology and applications for pay-TV operators to deliver digital content to set-top boxes and PVRs.
In a statement, Cisco said the acquisition would complement and accelerate the delivery of Videoscape, the company’s content delivery platform.
It said: “Acquiring NDS will broaden Cisco’s opportunities in the service provider market, expanding its reach into emerging markets, such as China and India, where NDS has an established customer footprint.”
According to News Corp, over 90 of the world’s leading pay-TV platforms use NDS systems.
Cisco chief executive and chairman John Chambers said: “Our strategy has always been driven by customer need and on capturing market transitions.
“Our acquisition of NDS fits squarely into this strategy, enabling content and service providers to deliver new video solutions that leverage the cloud and drive new monetisation opportunities and service differentiation.”
The acquisition is expected to close during the second half of the year.