Cisco Announces $2.6 Billion Acquisition Of Acacia Communications

By Amit Chowdhry ● July 10, 2019
  • Cisco announced it is acquiring Acacia Communications for $2.6 billion
  • As part of the deal, Cisco is paying $70 per share in cash for Acacia

Cisco has announced that it is acquiring Acacia Communications for $2.6 billion. Maynard, Massachusetts-based Acacia is an existing Cisco supplier that designs and manufactures high-speed and optical interconnect technologies for empowering webscale companies, service providers, and data center operators to meet the fast-growing consumer demand for data.

What are the terms of the deal? Cisco has agreed to acquire Acacia for $70 per share in cash ($2.6 billion on a fully diluted basis, net of cash and marketable securities).

As Cisco and Acacia come together, Cisco will support Acacia’s existing customers and new customers that want industry-leading coherent optics, digital signal processing / photonic integrated circuit modules, and transceivers for use in networking devices and data centers.

“By innovating across software, silicon, and optics, Cisco is reinventing every domain of the network with our intent-based architectures,” said David Goeckeler — EVP and general manager of Cisco’s networking and security business. “With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic. The acquisition of Acacia will allow us to build on the strength of our switching, routing and optical networking portfolio to address our customers’ most demanding requirements.”

Cisco is known for offering a full portfolio of optical systems to support webscale, service provider, enterprise, and public sector customer segments. These optical systems address performance, power, and cost requirements. 

And Acacia’s technology will enrich Cisco’s optical systems portfolio. This will also allow the growing number of customers transitioning from chassis-based systems to pluggable technology in order to simplify operations and reduce network complexities. 

“Coherent technology has been a game-changer for optical networking and continues to evolve with the deployment of pluggable coherent optics,” added Raj Shanmugaraj — president and CEO of Acacia. “Upon close, Cisco and Acacia will continue to serve and support existing Acacia customers. By integrating Acaciatechnology into Cisco’s networking portfolio, we believe we can accelerate the trend toward coherent technology and pluggable solutions while accommodating a larger footprint of customers worldwide.”

This acquisition is expected to close during the second half of Cisco’s FY2020 subject to customary closing conditions and required regulatory approvals. Once the transaction closes Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under Goeckeler.