NDS Buys Home-Gateway Software Maker

With an eye on new video-over-Internet-protocol services, NDS Group announced Monday the acquisition of Jungo Software Technologies, a developer of software for broadband residential gateways, in a deal worth up to $107.5 million in cash.

That purchase price includes a $17 million payment contingent on Jungo reaching certain fiscal targets in the 12 months after the company becomes part of NDS. The companies expect the deal to close in the first quarter of 2007.

Jungo’s products include OpenRG, middleware software for network devices that provides security, voice-over-IP, wireless access and other features. Its customers include Cisco Systems, Siemens and Westell Technologies. Verizon Communications is the largest U.S. telco that has deployed Jungo-based gateways.

NDS, majority-owned by News Corp., sells products that handle transactions for pay TV services.

NDS plans to operate Jungo as a separate unit, led by Jungo CEO Ofer Vilenski. However, Jungo will also be “closely collaborating with other NDS business groups” on initiatives for NDS customers, the company said.

For example, using Jungo’s technology, NDS expects to support distributed digital-video-recorder features for IPTV service providers. Content in a multiroom DVR setup could be stored and accessed on other devices in a home network, such as a PC, through Jungo’s gateway middleware, according to NDS.

Founded in 1998, Jungo has 140 employees. The company is based in San Jose, Calif., with research-and-development operations in Netanya, Israel, and a sales office in Taiwan. Investors in the privately held company include Infineon Ventures, Intel Communications Fund and TeleSoft Partners.

Jungo claims to be profitable, with revenues of $11.4 million for the nine months ended Sept. 30, more than double the same period the year earlier, according to the company.

NDS’ financial advisor in the transaction was Tamir Fishman, and its legal advisor in Israel was Herzog Fox Neeman. Jungo was advised by Jefferies Broadview and Ori Rosen.