Acacia Communications sold for $2.6B

Cisco to acquire Acacia Communications for $70.00 per share in cash

Acacia Comms tumbles, Stockwinners.com
Acacia Comms. sold to Cisco, Stockwinners.com

Cisco (CSCO) and Acacia Communications (ACIA) announced they have entered into a definitive agreement under which Cisco has agreed to acquire Acacia.

An existing Cisco supplier, Acacia designs and manufactures high-speed, optical interconnect technologies that allow web scale companies, service providers, and data center operators to meet the fast-growing consumer demands for data.

Cisco buys Acacia Comms. at a 47% premium, Stockwinners

Under the terms of the agreement, Cisco has agreed to acquire Acacia for $70.00 per share in cash, or for approximately $2.6B on a fully diluted basis, net of cash and marketable securities.

The acquisition is expected to close during the second half of Cisco’s FY2020, subject to customary closing conditions and required regulatory approvals.

Cisco, whose equipment makes up the backbone of the internet and corporate networks, has recently rekindled growth by revamping existing products and adding new software and services under a corporate makeover by Chief Executive Officer Chuck Robbins. In May, the company gave a bullish sales and profit forecast for the current period, a sign that corporations continue to spend on computer networks despite the trade dispute between China and the U.S.

Bill Gartner, who heads Cisco’s Optical Systems and Optics, wrote that Acacia’s products “are designed to transform communications networks through improvements in performance, capacity and cost.” He added that Acacia’s coherent optics technology will build on Cisco’s strength in optical, silicon, and software technologies.

Upon completion of this transaction, Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under David Goeckeler.

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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.