In a recent announcement, Cisco (NASDAQ: CSCO) and Splunk (NASDAQ: SPLK) have come to an agreement for Cisco to acquire Splunk for $157 per share in cash, resulting in an equity value of approximately $28 billion. Following the acquisition, Gary Steele, Splunk’s President and CEO, will join Cisco’s Executive Leadership Team and report directly to Chair and CEO Chuck Robbins.
This acquisition will allow Cisco to further its mission of securely connecting everything to make anything possible while building upon Splunk’s successful track record of improving digital resilience for organizations. By bringing together these two industry leaders in AI, security, and observability, organizations will be better equipped to achieve greater security and resilience.
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Chuck Robbins, chair and CEO of Cisco. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and CEO of Splunk.
“Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry. We’re thrilled to join forces with a long-time and trusted partner that shares our passion for innovation and world-class customer experience, and we expect our community of Splunk employees will benefit from even greater opportunities as we bring together two respected and purpose-driven organizations,” Steele added.
Data is essential for businesses to make decisions and run their operations in today’s connected world. However, the adoption of generative AI, the expansion of threats, and the use of multiple cloud environments have created unprecedented challenges for organizations. To help manage, protect, and unleash the true potential of data while maintaining digital resilience, Cisco and Splunk are joining forces. They are established leaders in AI, security, and observability, with complementary capabilities that will provide customers with comprehensive security analytics and coverage across devices, applications, and clouds. They will also offer observability in hybrid and multi-cloud environments, enabling businesses to deliver seamless application experiences that power their digital operations. With their substantial scale, data visibility, and foundation of trust, they are well-positioned to help customers harness the power of AI responsibly. The union of these two organizations will lead to greater investments in new solutions, accelerated innovation, and increased global scale. Moreover, the acquisition will unite two purpose-driven, inclusive organizations with a shared passion for innovation and remain the premier place for software talent.
Transaction Details
Cisco has agreed to acquire Splunk for $157 per share in cash, which equals $28 billion in equity value. This deal is expected to have a positive impact on cash flow and gross margin in the first fiscal year after the close. It will also increase Cisco’s revenue growth and gross margin expansion. The transaction will not affect Cisco’s share buyback or dividend program, and it has been approved by both boards of directors. The deal is expected to close by the end of Q3 2024, subject to regulatory approval and other customary closing conditions. Splunk shareholders must also approve the acquisition. For further details, please refer to Cisco’s Form 8-K.
Advisors
Cisco has appointed Tidal Partners LLC as their financial advisor, while Simpson Thacher & Bartlett LLP is serving as their legal counsel, and Cravath, Swaine & Moore LLP is acting as regulatory counsel. On the other hand, Splunk has engaged Qatalyst Partners and Morgan Stanley & Co. LLC as their financial advisors, and Skadden, Arps, Slate, Meagher & Flom LLP as their legal counsel.
