Cisco to pay US$2.6 bn for coherent optics specialist Acacia

Created July 10, 2019
News and Business

Cisco and Acacia Communications have entered into a definitive agreement under which Cisco has agreed to acquire Acacia for a consideration of US$2.6 billion. An existing Cisco supplier, Acacia designs and manufactures high-speed, optical interconnect technologies that allow webscale companies, service providers, and datacentre operators to meet the fast-growing consumer demands for data.

Under the terms of the agreement, Cisco has agreed to acquire Acacia for US$70.00 per share in cash, or for approximately US$2.6 billion on a fully diluted basis, net of cash and marketable securities. As Cisco and Acacia come together, Cisco plans to 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 products and datacentres.

“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 offers a portfolio of optical systems to support webscale, service provider, enterprise, and public sector customer segments. These optical systems address performance, power, and cost requirements. The aim is that Acacia’s technology will enrich Cisco’s optical systems portfolio. The acquisition is also designed to allow the growing number of customers transitioning from chassis-based systems to pluggable technology, 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, Acacia President and CEO. “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 this transaction, Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under David Goeckeler.

For more information, visit www.cisco.com and https://acacia-inc.com

 

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This article was written
by John Williamson

John Williamson is a freelance telecommunications, IT and military communications journalist. He has also written for national and international media, and been a telecoms advisor to the World Bank.