Acacia Communications

Acacia Communications  is the American producer of technologies of optical interconnections. In assortment of the company digital signal processors with low power consumption and also the advanced chips and fiber units for data transmission with a speed of 40-400 Gbps are provided. Acacia delivers solutions for telecommunication providers, operators of data centers and producers of network equipment, including Cisco.

History

2021

Cisco purchased Acacia Communications for $4.5 billion

In the middle of January, 2021 Cisco and Acacia Communications companies announced the conclusion of the final agreement according to which Cisco purchases Acacia company. According to new amendments, Acacia will pay $115 for an action, in general the cost of the transaction is $4.5 billion.

At the beginning of January, 2020 Acacia announced that it decided to terminate the merger agreement with Cisco after the company did not satisfy a number of final conditions, such as "obtaining necessary permissions of regulating authorities in the terms provided by the merger agreement".

Cisco purchased Acacia Communications

After negotiations the CEO of Acacia Raj Shanmugaradzh told that he is glad that between two companies after all the agreement was reached.

We are still strongly convinced of strategic advantages of accession to the Cisco family and we consider that it will allow us to support better our existing clients and also to expand a scope of new clients around the world", - told Shanmugaradzh. - We are glad to reach this agreement with Cisco and are glad to move ahead with a command which, according to us, will change the optical industry, giving to the staff of Acacia great opportunities for continuation of their innovations.

Raj Shanmugaradzh and all staff of Acacia will join business of Cisco on production of optics after closing of the transaction. The companies expect to close the transaction until the end of the first calendar quarter of 2021. Nevertheless, all last conditions should be all the same complied, including approval from present shareholders of Acacia. Cisco promises to continue after completion of the transaction cooperation with the existing clients of Acacia among whom there is a ZTE company because of which there was a delay in approval of the transaction from the Chinese authorities.^[1]

Failure of the transaction on sale to Cisco company

On January 8, 2021 Acacia announced canceling of the transaction on sale to the company to the producer of network equipment Cisco, having explained it with the fact that the Chinese authorities did not issue permission in the terms specified in the agreement between the companies.

As approval of public administration on regulation of the market at the government of China was not got in the terms provided by the merger agreement Acacia had no obligation to close the transaction before the prolonged end date on January 8, 2021 … Thus, Acacia exercised the right to stop the offered transaction in accordance with the terms of the merger agreement, says Acacia.

At Cisco the transaction on purchase of the developer of technologies of optical interconnections Acacia broke, the transaction was not approved by China

Cisco showed discontent to the broken transaction and took legal action of the State of Delaware with a request not to assume that Acacia refused absorption. Cisco said that the company satisfied all terms of transaction, and asked court to suspend process of an exit from it of Acacia until that understands the matter.

The transaction was going to be closed in the second half of 2020 financial year of Cisco. Before it approved regulators of the USA, Germany and Austria. The companies waited for "green light" from the Chinese authorities, but those delayed decision.

I consider it failure for Cisco — the vice president of Dell'Oro Group research company Jimmy Yu says, commenting on news about the broken sale of Acacia of Cisco company. — A year ago Cisco announced the technology strategy directed to delivery of the best chips, optics and the software. As for technology presence at optics, Cisco made several acquisitions. Acacia would be excellent purchase for Cisco, having completed strengthening of positions of the companies in the market of optical technologies as Acacia has deep experience in the field of coherent optics.[2]

2019: Cisco buys Acacia Communications for $2.6 billion

On July 9, 2019 Cisco announced acquisition of Acacia Communications for $2.6 billion. The cost of the transaction in terms of one stock of the sold company is $70 that is 45.7% more than a quotation rate to closing of the exchange on July 8.

The buyer will pay all amount from own means, without attracting the actions. It is going to close the transaction in the second half of 2020 financial year.

Cisco purchased the developer of technologies of optical interconnections for $2.6 billion

In three months prior to the declaration of Acacia sale securities of the company fell in price by 17% whereas the share price of Cisco rose by 1.8%. After the announcement of the transaction of quotation of Acacia jumped by 38%, and market capitalization — for $700 million to $2 billion. The quotations of Cisco this day sank for 1%.

Against the background of the explosive growth of capacity of networks during a multicloud era of technology of optical interconnections become more and more strategically important — the head of department of Cisco Networking and Security (it will include Acacia)  David Goeckeler says. — Acquisition of Acacia will allow us to use advantages of a product portfolio in the field of switching, routing and optical networks for satisfaction of the most exacting requests of our clients.

As notes Reuters, the transaction became the largest acquisition of Cisco since 2017 when the software developer for monitoring of performance of AppDynamics networks of $3.7 billion^[3] was absorbed]

Notes