Cisco Acquires Splunk for $28 Billion

Cisco, the US-headquartered cybersecurity and observability leader, has entered into a definitive agreement under which Cisco intends to acquire Splunk for $157 per share in cash, representing approximately $28 billion in equity value.

The transaction 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. Additionally, it will accelerate Cisco’s revenue growth and gross margin expansion.

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.

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, Cisco said in a statement on Thursday.

The acquisition builds on Splunk’s heritage of helping organisations enhance their digital resilience and will accelerate Cisco’s strategy to securely connect everything to make anything possible. The combination of these two established leaders in AI, security and observability will help make organizations more secure and resilient.

Chuck Robbins, who is the chair, and CEO of Cisco, said that the combined capabilities of the two companies 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, he said.

Steele said that uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating the company’s mission to help organisations 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 are 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 organisations,” Steele added.

Takeover to Complement Capabilities

The combination of these two established leaders with complementary capabilities in AI, security and observability will unlock the true value of data and will help make organizations of all sizes more secure and digitally resilient.

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 will provide observability across hybrid and multi-cloud environments enabling the company’s customers to deliver smooth application experiences that power their digital businesses. 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 will 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 will also build upon both companies’ reputations for being purpose-driven with similar values, strong cultures, and incredibly talented teams. The acquisition will unite two “Great Places to Work” with a shared passion for innovation and inclusion and will remain a great place to work and the premier place for software talent.