Acacia Communications Enters the Market With a Bang

Acacia Communications (NASDAQ: ACIA) entered the market with a bang on Friday, potentially signally a resurgence in the initial public offering (IPO) market. The company priced its 4.5 million shares at the high end of its range of $21 to $23 per share. At this price, the entire offering would have been valued up to roughly $119 million. However the stock actually entered the market at $29, well above the set price.

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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In the IPO 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.

Shares of Acacia were last seen trading up more than 35% at $31.62, with a range on the day of $29.00 to $31.94, and over 2 million shares having moved as of 11:30 a.m. Eastern.