Cisco and Splunk, the cybersecurity and observability leader, announced today a final agreement under which Cisco intends to buy Splunk for $157 per share in cash, representing an equity value of roughly $28 billion. After the transaction is completed, Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team and report to Chair and CEO Chuck Robbins.
The acquisition builds on Splunk’s history of assisting organisations in improving their digital resilience and accelerates Cisco’s aim of securely connecting everything to make anything possible. The combination of these two established experts in artificial intelligence, security, and observability will help organisations become more safe and resilient.
“We’re thrilled to be bringing Cisco and Splunk together.” “Our combined capabilities will power the next generation of AI-enabled security and observability,” said Cisco Chairman and CEO Chuck Robbins. “From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient.”
“This is the next step in Splunk’s growth journey, accelerating our mission to help organisations around the world become more resilient while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and CEO of Splunk.
“By working together, we will create a global security and observability leader that will use data and AI to deliver excellent customer outcomes and transform the industry.” “We’re thrilled to be collaborating with a long-time and trusted partner who shares our passion for innovation and world-class customer experience, and we anticipate that our Splunk community will benefit from even more opportunities as we bring together two respected and purpose-driven organisations,” Steele added.
Data is omnipresent in today’s hyperconnected world, and every organisation relies on it every day to run their business and make mission-critical choices. When you combine the acceleration and adoption of generative AI, expanding danger surfaces, and numerous cloud environments, you have a degree of complexity that organisations have never seen before. Organisations require a better approach to manage, preserve, and extract the full value of data in order to remain digitally resilient.
Cisco and Splunk will tackle these difficulties straight on.
The merger of these two recognised experts, each with complementary strengths in AI, security, and observability, will unlock the actual value of data and assist organisations of all sizes in becoming more safe and digitally resilient.
Splunk’s security capabilities, in particular, will complement Cisco’s existing portfolio, providing top security analytics and coverage from devices to apps to clouds.
The complementary capabilities of Cisco and Splunk will provide observability across hybrid and multi-cloud systems, allowing the companies’ clients to create smooth application experiences that power their digital enterprises. Given their significant scale, data visibility, and trust foundation, Cisco and Splunk are well positioned to assist customers in harnessing the power of AI safely.
The merger of these two organisations will enable bigger investments in innovative products, faster innovation, and higher global scale to meet the demands of clients of all sizes.
The acquisition of Splunk by Cisco will also improve both companies’ reputations as purpose-driven businesses with shared values, strong cultures, and extraordinarily talented employees. The merger will unite two “Great Places to Work” with a shared commitment to innovation and inclusion, ensuring that both organisations remain fantastic places to work and the finest destination for software talent.
Specifics of the Transaction
According to the terms of the agreement, Cisco intends to acquire Splunk for $157 per share in cash, or almost $28 billion in equity value. The transaction is expected to be cash flow positive and gross margin accretive in the first fiscal year following completion, as well as non-GAAP EPS accretive in the second. Furthermore, it will accelerate Cisco’s revenue growth and gross margin expansion.
The deal will have no effect on Cisco’s previously announced share buyback or dividend programme.
Both Cisco and Splunk’s boards of directors unanimously authorised the purchase. It is planned to close by the end of the third quarter of fiscal year 2024, subject to regulatory approval and other standard closing conditions, including Splunk shareholder approval.
Please consult Cisco’s Current Report on Form 8-K, which will be filed in conjunction with the transaction, for more details on all terms and conditions contained in the definitive agreement.
