Network gear maker Cisco Systems Inc said on Tuesday it would buy optical component maker Acacia Communications Inc for $2.84 billion in cash.
The $70 per share offer represents a premium of about 46 per cent to Acacia’s closing price on Monday.
The deal is Cisco’s biggest acquisition for Cisco since its $3.7-billion purchase of business performance monitoring software company AppDynamics in 2017.
Shares of Acacia rose about 40 per cent to $67.30, while those of Cisco were down nearly 1 per cent at $55.80.
Excluding Acacia’s cash and marketable securities, the deal is valued at $2.6 billion, Cisco said.
The acquisition is expected to close in during the second half of Cisco’s full year 2020.
Maynard, Massachusetts based Acacia, also a Cisco supplier, designs and manufactures high-speed, optical components, and counts telecom service providers and data center operators as customers.