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Cisco announces acquisition of Acacia for $2.6bn

Written by Wed 10 Jul 2019

Cisco data centre

Cisco buys optical interconnect specialist to develop intent-based networking portfolio

Cisco has announced it is to buy one of its suppliers, optical interconnect specialist Acacia Communications, for $2.6bn (£2.08bn) in cash.

The networking giant said the deal will strengthen its software, silicon and optics capabilities, helping the company to make networks smarter, simple and more secure.

“By innovating across software, silicon and optics, Cisco is reinventing every domain of the network with our intent-based architectures,” said David Goeckeler, executive VP and GM 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.”

Raj Shanmugaraj, president and CEO of Acacia, said the acquisition will enable Acacia to tap into global markets:

“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,” said Shanmugaraj.

Acacia, which is headquartered in Maynard, west of Boston, raised $103.5m (£82m) in a public offering in 2016. However, the company has been one of the biggest losers in the ongoing US-China trade war, after a US Department of Commerce directive blocked American companies from selling products to ZTE  (a customer responsible for 30 percent of Acacia’s sales, according to The Motley Fool).

The deal is expected to close during the second half of Cisco’s 2020 financial year, subject to closing conditions and regulatory approval. If the deal goes through, Acacia employees will join Cisco’s Optical Systems and Optics business.

Written by Wed 10 Jul 2019


M&A networking
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