Acacia Communications Files for IPO

Acacia Communications has filed and S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, but the stock is valued up to $125 million. The company intends to list on the Nasdaq Global Market under the symbol ACIA.

The underwriters for this offering are Goldman Sachs, Merrill Lynch, Deutsche Bank, Needham, Cowen and Northland Capital Markets.

The company’s mission is to deliver high-speed coherent optical interconnect products that transform communications networks, relied on by cloud infrastructure operators and content and communication service providers, through improvements in performance and capacity and a reduction in associated costs. By converting optical interconnect technology to a silicon-based technology, a process Acacia refers to as the siliconization of optical interconnect, the company believes it is leading a disruption that is analogous to the computing industry’s integration of multiple functions into a microprocessor.

The products include a series of low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits that it has integrated into families of optical interconnect modules with transmission speeds ranging from 40 to 400 gigabits per second, for use in long-haul, metro and inter-data center markets. Acacia’s modules perform a majority of the digital signal processing and optical functions in optical interconnects and offer low power consumption, high density and high speeds at attractive price points. Through the use of standard interfaces, these modules can be easily integrated with customers’ network equipment. The advanced software in its modules enables increased configurability and automation, provides insight into network and connection point characteristics and helps identify network performance problems, all of which increase flexibility and reduce operating costs.
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In the filing, the company detailed its finances as follows:

We have experienced rapid revenue growth over the last several years. Our revenue for 2014 was $146.2 million, an 88.3% increase from $77.7 million of revenue in 2013. Our revenue for the nine months ended September 30, 2015 was $170.5 million, a 62.0% increase from $105.2 million of revenue in the nine months ended September 30, 2014. In 2014, we generated net income of $13.5 million and our adjusted EBITDA was $20.4 million, compared to a net loss of $1.2 million and adjusted EBITDA of $3.6 million in 2013. For the nine months ended September 30, 2015, we generated net income of $17.9 million and our adjusted EBITDA was $31.7 million, compared to net income of $11.0 million and adjusted EBITDA of $16.0 million for the nine months ended September 30, 2014.

The company intends to use the net proceeds from the offering for working capital and general corporate purposes.