A new Cisco-Acacia Communications deal has ACIA stock on its way up Tuesday.
The news here is that Cisco (NASDAQ:CSCO) is looking to purchase Acacia Communications (NASDAQ:ACIA) for a total of $2.60 billion. This will have it making an offer of $70 per share for ACIA stock. The offer will be made using cash.
The offer price of $70 per share is a pretty premium for investors in ACIA stock. It represents a roughly 46% increase over the stock’s closing price for Monday.
So long as everything goes well, the two companies are expecting the Cisco-Acacia Communications deal to close during the second half of ACIA’s fiscal 2020 year. This means it will need to complete customary closing conditions and get approval from regulators.
Once the Cisco-Acacia Communications deal is complete, Cisco will take over Acacia Communications’ current customers and new ones. It will also move the company’s employees to its Optical Systems and Optics business. This will have them serving under David Goeckeler, the Executive Vice President and General Manager of CSCO’s security business.
“With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic,” Goeckeler said in a statement. “The acquisition of Acaciawill allow us to build on the strength of our switching, routing and optical networking portfolio to address our customers’ most demanding requirements.”
ACIA stock was up 35% and CSCO was up slightly as of noon Tuesday.
As of this writing, William White did not hold a position in any of the aforementioned securities.