Veteran internet communications tech giant Cisco announced today its entrance into an agreement with Massachusetts-based high-speed coherent optical interconnect product manufacturer Acacia Communications. The acquisition is part of Cisco’s initiative to pursue making its networks faster, more simple and more secure.
According to the terms of the deal, Cisco will pay US$70 per share of Acacia in cash, for a total consideration of $2.6bn.
Acacia is already an existing supplier to Cisco, specializing in the design and manufacture of high-speed, optical interconnect technologies that allow webscale companies, service providers, and data center operators to meet the fast-growing consumer demands for data.
"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."
Upon completion of the acquisition, Acacia employees will join Cisco's Optical Systems and Optics business within the networking and security business under Goeckeler.
"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 deal is expected to close during the second half of 2020, and awaits regulatory approval.