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Cisco to acquire Acacia to USD 2.6bn
Posted on Tuesday, 09 July 2019 14:05
Cisco Systems has agreed to acquire Acacia Communications, an existing supplier to the buyer that designs and manufactures high-speed, optical interconnect technologies, for USD 2.60 billion on a fully-diluted basis, net of cash and marketable securities.
The Nasdaq-listed technology leader is offering USD 70.00 per share, representing a premium of 45.7 per cent to the target’s close of USD 28.06 prior to the announcement yesterday.
Shares in Acacia rose 36.1 per cent to USD 65.42 at 08:46 today, giving the group a market capitalisation of USD 1.95 billion.
The company provides advanced services for the optical transport and network infrastructure equipment market, designing and making transceiver subsystems that enable customers to reduce overall development costs while improving performance and time to market for customers.
It has offices in New Jersey, California and overseas in Ireland and is expecting to use Cisco’s support to better assist existing customers and bring in new clients.
During the three months ended 31st March 2019, Acacia generated revenue of USD 105.22 million, up 44.3 per cent from USD 72.94 million in the corresponding period of 2018.
Net income totalled USD 6.98 million in Q1 2019, compared to a net loss of USD 9.08 million in Q1 2018.
David Goeckeler, general manager of Cisco’s networking and security business, said: “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.”
Closing is subject to regulatory approvals and is expected to complete during the second half of Cisco’s FY 2020.
The acquiror already offers a full portfolio of optical systems to support webscale, service provider, enterprise and public sector customer segments.
Shares in Cisco were trading up slightly following the announcement at USD 56.38 at 09:37 today, valuing the business at USD 240.53 billion.
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