Home Technology Cisco plans to acquire Acacia Communications in a $2.6 billion deal

Cisco plans to acquire Acacia Communications in a $2.6 billion deal

Chuck Robbins, CEO of Cisco, speaking at the 2019 WEF in Davos, Switzerland on Jan. 23rd, 2019.

Adam Galica | CNBC

Cisco plans to acquire Acacia Communications for $70 per share in cash in a $2.6 billion deal on a fully diluted basis, the companies announced Tuesday.

Acacia was up more than 38% during premarket trading Tuesday, adding more than $700 million to its market cap, which is now $2 billion. Cisco was down 1% in the premarket.

The acquisition will enhance Cisco’s optical systems portfolio, according to a press release. Acacia is a networking company that is already a supplier for Cisco.

The deal is expected to close in the second half of Cisco’s fiscal year 2020, according to the announcement. Acacia employees will become part of Cisco’s Optical Systems and Optics business upon the close, the companies said.

Last year, Cisco announced plans in August to acquire cloud-based cybersecurity firm Duo Security for $2.35 billion in cash and stock. In December, Cisco said it planned to acquire semiconductor company Luxtera for $660 million in cash and assumed equity.

Subscribe to CNBC on YouTube.

Watch: Discussing the potential impact of next generation wireless standards