Acacia Communications Closes in on IPO

Acacia Communications registered an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). The company expects to price its 4.5 million shares within the range of $21 to $23 per share. There is also an overallotment option for an additional 675,000 shares. At the maximum price, the entire offering is valued up to roughly $119 million. The company intends to list on the Nasdaq Global Market under the symbol ACIA.

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

This company’s mission is to deliver high-speed coherent optical interconnect products that transform communications networks, relied upon 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 referred to as the siliconization of optical interconnect.

Acacia believes it is leading a disruption that is analogous to the computing industry’s integration of multiple functions into a microprocessor. Its products include a series of low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits, which 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.
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The company is also developing optical interconnect modules that will enable transmission speeds of one terabit per second and more. Its 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, the modules can be easily integrated with customers’ network equipment. The advanced software in the 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.

In the filing, the company described its finances as follows:

Our revenue for 2015 was $239.1 million, a 63.5% increase from $146.2 million of revenue in 2014. Our revenue for the three months ended March 31, 2016 was $84.5 million, a 78.8% increase from $47.2 million of revenue in the three months ended March 31, 2015. In 2015, we generated net income of $40.5 million and our adjusted EBITDA was $47.5 million, compared to net income of $13.5 million and adjusted EBITDA of $20.4 million in 2014. For the three months ended March 31, 2016, we generated net income of $14.6 million and our adjusted EBITDA was $17.9 million, compared to net income of $4.3 million and adjusted EBITDA of $7.9 million for the three months ended March 31, 2015.

Acacia intends to use the net proceeds of this offering for working capital and general corporate purposes.