Cisco to buy Splunk in $28bn deal
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Cisco to buy Splunk in $28bn deal

Cisco to buy Splunk in $28bn deal

Splunk president and CEO Gary Steele will join Cisco’s executive leadership team

Cisco Splunk

Cisco has announced a definitive agreement to acquire Splunk, the cybersecurity company for $157 per share in cash, representing approximately $28bn in equity value.

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.

Splunk’s security capabilities will complement Cisco’s existing portfolio, and together, will provide security analytics and coverage from devices to applications to clouds.

Both entities’ complementary capabilities will provide observability across hybrid and multi-cloud environments enabling the company’s customers to deliver smooth application experiences.

The union of these two organisations will allow for greater investments in new solutions, accelerated innovation, and increased global scale to support the needs of customers of all sizes, a statement said.

“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.”

“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organisations worldwide become more resilient, while delivering immediate and compelling value to our shareholders,” said Steele.

“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 organisations,” Steele added.

Transaction details

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 transaction will not impact Cisco’s previously announced share buyback programme or dividend programme.

The acquisition has been unanimously approved by the boards of directors of both the companies. 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.

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