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Cisco to acquire Splunk for £22.9bn in landmark software deal

Written by Thu 28 Sep 2023

Cisco Splunk logos

Cisco has agreed to acquire cybersecurity firm Splunk for £22.9 billion ($28 billion) in the biggest technology deal of the year so far.

Together, Cisco and Splunk will help move organisations from threat detection and response to threat prediction and prevention.

Cisco said the acquisition makes them ‘well positioned to lead in security and observability in the age of AI’.

Under Chuck Robbins, CEO of Cisco, the company has started to shift its focus from hardware to software and services.

“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Robbins.

Splunk is known for its data observability strengths, which helps companies monitor their systems for cybersecurity risks.

“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,” said Gary Steele, President and CEO of Splunk.

The acquisition was unanimously approved by the boards of directors of both Cisco and Splunk.

Cisco Acquisition Boosts Splunk Stock

Splunk’s stock price increased by over 21% to reach £118 ($145) per share. This was was still lower than the price Cisco paid to acquire Splunk.

Cisco offered £128 ($157) in cash for each share of Splunk. This represented a 31% premium to the company’s last closing price.

According to both companies, the acquisition will accelerate revenue growth and gross margin expansion at Cisco in the first fiscal year after the deal’s close.

Cisco had completed sizable acquisitions in the past, but its takeover of Splunk is the largest in its almost-40-year history.

In 2012, Cisco bought TV software company NDS for $4 billion ($5 billion). In 2017 it bought business software firm AppDynamics Inc for £3 billion ($3.7 billion).

Analysts noted that the security sector overlap might trigger antitrust scrutiny, but Cisco expressed confidence in regulatory approval.

If the deal is shelved, Cisco will have to pay a termination fee of £1.12 billion ($1.48 billion).

The deal will close in Q3 2024, pending regulatory and shareholder approval.

Upon close of the acquisition, Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team reporting to Chair and CEO Chuck Robbins.

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Written by Thu 28 Sep 2023

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