Cisco to acquire Splunk

SAN JOSE and SAN FRANCISCO, Calif. — Cisco and cybersecurity software company Splunk have announced a definitive agreement under which Cisco intends to acquire Splunk for $157 per share in cash, representing approximately $28 billion in equity value.

Cisco reported that 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. In a release issued on the acquisition the parties stated that “The combination of these two established leaders in AI, security and observability will help make organizations more secure and resilient.”

“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. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

Cisco and Splunk said that businesses and organizations face increasing amounts of mission critical decisions each day from sources like generative AI, multiple cloud environments, and expanding threat surfaces, and that together, they will address those challenges head on. They noted that the combination of 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.

“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,” said Steele.

He added, “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.”

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, Cisco said it will accelerate its revenue growth and gross margin expansion.The transaction will not impact Cisco’s previously announced share buyback program or dividend program.

The acquisition was approved by the boards of both companies and 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.