Cisco Systems. Inc. (NASDAQ: CSCO – $56.54) said it agreed to buy Acacia Communications, Inc. for about $2.6 billion, in a deal that boosts Cisco’s optical networking portfolio. Acacia, of Maynard, Mass., delivers high-speed coherent optical interconnect products, relied upon by cloud infrastructure operators and content and communication service providers. Customers include leading network equipment manufacturers and is a current supplier to San Jose-based Cisco. Pending regulatory approvals, 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, executive vice president and general manager of 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.”
Shares of Cisco, yielding 2.5%, are up nearly 32% over the past fifty-two weeks and remain a solid choice for conservative income investors.