Acacia Communications skyrockets after Cisco announces plans to acquire the company
- Cisco Systems has announced an agreement to acquire Acacia Communications for $70 per share, in a deal worth roughly $2.6 billion.
- Shares of Acacia soared on the news, while shares of Cisco declined slightly.
- The deal is expected to close in the second half of Cisco's fiscal year 2020.
- Watch Acacia trade live on Markets Insider.
Investors piled into shares of Acacia Communications when Cisco Systems announced early Tuesday that it had reached a definitive agreement to acquire the company.
Shares of Acacia soared more than 38% pre-market, while shares of Cisco were down more than 1% on the news.
Cisco has agreed to buy Acacia for $70 per share in cash, meaning the deal will be worth about $2.6 billion in total, according to a press release. The acquisition is expected to close during the second half of Cisco's fiscal year 2020.
Upon the close, Acacia employees will join Cisco's networking and security business and will report to David Goeckeler, the executive vice president and general manager of that business for Cisco. Cisco will 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," said Raj Shanmugaraj, the president and CEO of Acacia.
The deal is one of several that Cisco has announced in recent months. In June, it acquired a French industrial internet-of-things company called Sentryo to boost its device management and security features. The company announced plans to acquire Duo Security, a cybersecurity firm, in August for $2.35 billion in cash and stock. Cisco also said in December that it had plans to acquire Luxtera, a semiconductor company, for $660 million.
Shares of Acacia were up 26% this year through Monday's close.
