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Network gear maker Cisco Systems Inc said on Tuesday it would buy optical component maker Acacia Communications Inc for $2.84 billion in cash.

The $70 per share offer represents a premium of about 46 per cent to Acacia’s closing price on Monday.

The deal is Cisco’s biggest acquisition for Cisco since its $3.7-billion purchase of business performance monitoring software company AppDynamics in 2017.

Shares of Acacia rose about 40 per cent to $67.30, while those of Cisco were down nearly 1 per cent at $55.80.

Excluding Acacia’s cash and marketable securities, the deal is valued at $2.6 billion, Cisco said.

The acquisition is expected to close in during the second half of Cisco’s full year 2020.

Maynard, Massachusetts based Acacia, also a Cisco supplier, designs and manufactures high-speed, optical components, and counts telecom service providers and data center operators as customers.