SAN JOSE, CA – Cisco is selling its Service Provider Video Software Solutions business, formerly known as NDS, which Cisco acquired for $5 billion in 2012, to private equity firm Permira. After the deal closes, Permira plans to launch a new, rebranded company to video solutions for the Pay-TV industry.

Although financial details were not disclosed, reports say it is for about $1 billion.

Jerusalem-based NDS catered to traditional cable and satellite TV providers, a sector of the industry facing changes in the way people consume video.

The new company will encompass a broad portfolio, including Cisco’s Infinite Video Platform, cloud digital video recording, video processing, video security, video middleware, and services groups. Video industry leader Abe Peled, former Chairman and CEO of NDS and adviser to the Permira Funds, will chair the new company. Permira is a global investment firm.

“This is a unique opportunity to lead and shape the video industry during its transition with the flexibility as a private company,” said Peled in a statement.

“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.  Cisco has built a profitable business in the video space with innovations to capitalize on IP distribution and cloud-based services.”

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, Chairman and CEO, Cisco, in a statment. “With the leadership team and Abe as Chairman, 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.”

The transaction, subject to customary closing conditions and regulatory approvals, is expected to warp in Cisco’s first quarter in 2019.