Deal valued at $2.6 billion, expected to close in fiscal-year 2020
Cisco this week announced the purchase of Acacia Communications in a deal valued at $2.6 billion. The deal gives Cisco access to Acacia’s portfolio of high-speed, optical interconnect technologies used in networking gear built for webscale companies, service providers, and data center operators.
The Lowdown: Under the terms of the agreement, Cisco plans to support Acacia’s existing and new customers that leverage optical digital signal processing, photonic integrated circuit modules, and transceivers in the manufacturing of networking products and data centers.
The Details: The acquisition is expected to close during the second half of Cisco’s 2020 fiscal year. Once the deal is done, Acacia employees will join Cisco’s Optical Systems and Optics business within the networking and security business under that unit’s Executive Vice President David Goeckeler.
The Impact: Incorporating Acacia’s technology will bolster Cisco’s optical systems portfolio as it looks to serve the growing number of customers transitioning from chassis-based systems to pluggable technology to simplify operations and reduce network complexity.
The Buzz: “By innovating across software, silicon, and optics, Cisco is reinventing every domain of the network with our intent-based architectures,” said Goeckeler. “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.”
“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 CEO at 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.”