Cisco and Splunk (a cybersecurity and observability leader) recently announced a definitive agreement under which Cisco intends to acquire Splunk for $157 per share in cash, representing approximately $28 billion in equity value. And upon the closing of the acquisition, Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team reporting to Chair and CEO Chuck Robbins.
This acquisition builds on Splunk’s heritage of helping organizations enhance their digital resilience and will accelerate Cisco’s strategy to connect everything to make anything possible securely. And the combination of these two established leaders in AI, security and observability will help make organizations more secure and resilient.
Data is everywhere in this hyperconnected world, with every organization relying on it to run their business and make mission-critical decisions every day. And factoring in the acceleration and adoption of generative AI, expanding threat surfaces, and multiple cloud environments, it creates a level of complexity that is unlike anything organizations have faced. Organizations need a better way for managing, protecting, and unlocking the true value of data. Cisco and Splunk will address these challenges head on.
The combination of these two established leaders with complementary capabilities in AI, security and observability are going to unlock the true value of data and will help make organizations of all sizes more secure and digitally resilient. And specifically, Splunk’s security capabilities complement Cisco’s existing portfolio, and together, will provide leading security analytics and coverage from devices to applications to clouds.
Cisco and Splunk’s complementary capabilities are going to provide observability across hybrid and multi-cloud environments enabling the company’s customers to deliver smooth application experiences that power their digital businesses. And Cisco and Splunk are well-positioned to help customers responsibly harness the power of AI given their substantial scale, visibility into data, and foundation of trust.
The union of these two organizations are going to allow for greater investments in new solutions, accelerated innovation, and increased global scale to support the needs of customers of all sizes.
Cisco’s acquisition of Splunk is also going to build upon both companies’ reputations for being purpose-driven with similar values, strong cultures, and incredibly talented teams.
Deal Details
Under the terms of the agreement, Cisco intends to acquire Splunk for $157 per share in cash – representing approximately $28 billion in equity value. And the deal is expected to be cash flow positive and gross margin accretive in the first fiscal year post close, and non-GAAP EPS accretive in year two. Plus, it will accelerate Cisco’s revenue growth and gross margin expansion.
The deal will not impact Cisco’s previously announced share buyback program or dividend program. And the acquisition has been unanimously approved by the boards of directors of both Cisco and Splunk. It is expected to close by the end of the third quarter of calendar year 2024, subject to regulatory approval and other customary closing conditions including approval by Splunk shareholders.
KEY QUOTES:
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
— Chuck Robbins, chair and CEO of Cisco
“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.”
“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.”
— Gary Steele, president and CEO of Splunk
