Site icon Warrior Trading News

Acacia Shares Soar 35% After Cisco Buyout Deal

Acacia Communications

Cisco Systems Inc (NASDAQ: CSCO) has agreed to acquire Acacia Communications Inc. (NASDAQ: ACIA) for about $2.6 billion. Acacia will receive $70 a share in cash from Cisco, a roughly 45.7% premium to Acacia’s closing price of $48.06 on Monday.

The companies expect to close the transaction during the second half of fiscal 2020. It would be Cisco’s second-largest acquisition since Chuck Robbins assumed his role as CEO of the company 4 years ago.

Acacia employees will join Cisco’s optical systems and optics business under Cisco executive vice president David Goeckeler in a statement. The network gear maker will continue to serve support existing Acacia customers.



“By innovating across software, silicon and optics, Cisco is reinventing every domain of the network with our intent-based architectures. With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic,” said Mr. Goeckeler in a statement. “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.”

“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,” commented Acacia CEO Raj Shanmugaraj.

Shares of Acacia gained more than 38% to $66 before the opening bell, while those of Cisco declined 1% following the announcement. As of 10:17 a.m. ET, Acacia stock was up $16.98, or 35.32% to $65.04 a share.

Acacia Communications Inc Profile

Acacia Communications Inc manufactures optical interconnect products used in offering communication services. The company offers optical interconnect solutions such as sophisticated modules for digital signal processing (DSP) and optical functions required to process network traffic.

Its product application includes in Submarine, Long-haul terrestrial networks, metro carrier, and Data Center Interconnect. The company generates most of its revenues from China and has operates spread across the United States, Germany, Thailand, and other countries.

Exit mobile version