By Colin Kellaher

Cisco Systems Inc. on Tuesday said it agreed to buy Acacia Communications Inc. for about $2.6 billion, in a deal that boosts Cisco's optical networking portfolio.

Cisco said it will pay $70 a share in cash for Acacia, a roughly 45.7% premium to the company's closing price of $48.06 on Monday.

Acacia, of Maynard, Mass., is a maker of high-speed, optical interconnect technologies and a current supplier to San Jose-based Cisco.

Cisco said it plans to complete the acquisition during the second half of fiscal 2020.

"With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic," said David Goeckeler, who heads Cisco's networking and security business. "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."

Cisco said Acacia's employees will join its optical systems and optics business within the networking and security business under Mr. Goeckeler.

Shares of Acacia surged 38.3% to $66.45 in premarket trading Tuesday. Cisco shares slipped about 1.2%.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

July 09, 2019 09:53 ET (13:53 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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