(Adds details, quote, background)
TEL AVIV Dec 4 (Reuters) - NDS Group Plc NNDS.O, which provides technology for digital pay-TV, said it will acquire Israel's Jungo Ltd., which develops residential gateway software, for up to $107.5 million in cash.
This includes a $17 million payment contingent on the attainment of certain targets in the 12 months following completion of the deal.
The deal is expected to be completed in the first calendar quarter of 2007, NDS said in a statement.
NDS, a majority owned subsidiary of News Corp. NWS.N, is headquartered in Britain with development centres in Israel and elsewhere.
Jungo's customers include companies like Cisco and Siemens, who sell their residential gateways to major broadband pay-TV operators such as France Telecom, NTT, Qwest, Telecom Italia, Verizon and others.
In the nine months ending September 30, Jungo's revenues grew by more than 100 percent to $11.4 million. NDS noted that Jungo was a profitable company.
Residential gateways are increasingly deployed by telecommunication companies as the main service termination point in the customer premises for the delivery of services including broadband data, IPTV, voice over internet protocol (VoIP) telephony, video telephony and convergent wireless/wireline telephony.
The residential gateway and the software contained in it act as the interface between the broadband network and the various consumer electronic devices that are attached in the home network including IPTV set-top boxes.
"The acquisition of Jungo positions NDS to better serve the ever-increasing need of pay-TV and telecom network operators to offer reliable video over broadband services," Abe Peled, NDS president and chief executive, said in a statement.
Jungo will continue to operate as a separate unit within NDS under the leadership of the current management team.
Among Jungo's investors are Intel Capital, the venture capital arm of Intel Corp. (INTC.O).