Shares of Acacia Communications (NASDAQ: ACIA) soared 38% on Tuesday after the tech company announced it will be acquired by Cisco Systems, Inc. (NASDAQ: CSCO) in a USD 2.6 Billion deal.
“With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic,” said David Goeckeler, Executive Vice President and General Manager of Cisco’s networking and security business. “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.” Acacia, headquartered in Massachusetts, develops, manufactures and sells high-speed optical interconnect products. It is also a current supplier to San Jose-based Cisco.
Following the deal’s expected close in the second half of fiscal 2020, Acacia employees will join Cisco’s optical systems and optics business within the networking and security business under Mr. Goeckeler.
According to Bill Gartner, Senior Vice President and GM of Cisco’s Optical Systems and Optics Group, cloud and service providers face three primary challenges: increasing the capacity on existing fiber infrastructure, driving down cost per bit, and eliminating human error. Cisco said Acacia’s technology will “allow the growing number of customers transitioning from chassis-based systems to pluggable technology to simplify operations and reduce network complexities.”
Last October, Cisco announced in completed the acquisition of cloud-based cybersecurity firm Duo Security for USD 2.35 Billion in cash and stock. The Company followed up with the purchase of semiconductor company Luxtera in February.
Shares of Cisco have gained 30% this year versus telecom rivals like Juniper Networks (NYSE: JNPR), down 3%, and Hewlett Packard (NYSE: HPE) up nearly 12%.