Cisco buying coherent optics outfit

Cisco (NASDAQ:CSCO) and Acacia Communications (NASDAQ:ACIA) have entered into a definitive agreement under which Cisco has agreed to acquire Acacia. An existing ...

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Cisco (NASDAQ:CSCO) and Acacia Communications (NASDAQ:ACIA) have entered into a definitive agreement under which Cisco has agreed to acquire Acacia. An existing Cisco supplier, Acacia designs and manufactures optical interconnect technologies for webscale companies, service providers, and data center operators.

Under the terms of the agreement, Cisco has agreed to acquire Acacia for $70 per share in cash, or for approximately $2.6 billion on a fully diluted basis, net of cash and marketable securities. Cisco plans to support Acacia's existing customers and new customers with coherent optics, digital signal processing/photonic integrated circuit modules, and transceivers for use in networking products 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, executive vice president 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."

The Acacia acquisition is intended to strengthen Cisco's portfolio of optical systems.

"Coherent technology has been a game-changer for optical networking and continues to evolve with the deployment of pluggable coherent optics," said Raj Shanmugaraj, president and chief executive officer, Acacia. "Upon close, Cisco and Acacia will continue to serve and support existing Acacia customers. By integrating Acacia technology 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."

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