- Data insights giant recently announced that it was acquiring SignalFx for $1.05 billion. These are the details behind the deal.
Splunk — the data insights giant — announced a definitive agreement to acquire SignalFx for $1.05 billion. SignalFX is a SaaS leader in real-time monitoring and metrics for cloud infrastructure, microservices, and applications.
Splunk is a leader in IT operations management and an AIOps pioneer and upon closing, it will be a leader in observability and APM for organizations at every stage of their cloud journey ranging from cloud-native apps to homegrown on-premises applications.
And this innovation will help customers deliver cost savings, increased revenue and improved customer experience. Plus this firmly places Splunk as the vendor most qualified to deliver these outcomes across the entire suite of enterprise applications at any scale.
As part of the agreement, Splunk will acquire SignalFx for a total purchase price of approximately $1.05 billion subject to adjustment to be paid approximately 60% in cash and 40% in Splunk common stock. And the acquisition is expected to close in the second half of fiscal 2020 subject to customary closing conditions and regulatory reviews.
“Data fuels the modern business, and the acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale,” said Splunk president and CEO Doug Merritt. “SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application lifecycle. We are also incredibly impressed by the SignalFx team and leadership, whose expertise and professionalism are a strong addition to the Splunk family.”
Cloud-native technologies like microservices, containers, orchestrated environments such as Docker and Kubernetes, and serverless functions are driving business outcomes not anticipated just a few years ago as data volumes continue to grow exponentially. And at the same time, they introduce unique challenges to IT professionals and developers tasked with ensuring high availability and seamless operations.
“By joining Splunk, we will create a powerful monitoring platform – one ready to support CIOs whether they have fully embraced cloud or have existing applications in the data center,” added SignalFX founder and CEO Karthik Rau. “As the world continues to move towards complex, cloud-first architectures, Splunk and SignalFx is the new approach needed to monitor and observe cloud-native infrastructure and applications in real-time, whether via logs, metrics or tracing. The SignalFx team is thrilled to join Splunk to help CIOs capitalize upon the modern application portfolio.”
As Splunk and SignalFx are combining, it will give IT and developers a data platform that allows them to monitor and observe data in real-time, no matter the infrastructure or data volume, helping them cut costs, boost revenue and improve the customer experience. And this enables organizations to work across their entire data landscape, not just silos in the data center or cloud-native environments.
By 2022, more than 75% of global organizations are expected to be running containerized applications in production — which is a significant increase from fewer than 30% today, according to Gartner. And customers can use Splunk and SignalFx technology to deploy applications in the cloud, on-premises, or in hybrid environments and get real-time observability and response across all of these systems with a single interconnected platform.
“The strength of our balance sheet allows us to pay the majority of purchase price consideration with cash on hand. Total equity consideration plus initial SignalFx employee retention incentives will result in less than three percent total dilution from this transaction,” explained Splunk CFO Jason Child. “Post-closing, we expect to absorb the acquired operational expenses of SignalFx within our existing plan. At this time, we are reaffirming our full-year non-GAAP operating margin target.”
Prior to the acquisition, SignalFx raised around $178.5 million in funding (Crunchbase profile), including a $75 million round earlier this year. SignalFx’s investors included Tiger Global, General Catalyst, Andreessen Horowitz, and CRV.
