- M&A
- September 21, 2023
- 3 minutes read
Cisco To Buy Cybersecurity Company Splunk For $28B
Cisco (NASDAQ: CSCO), an American IT and networking equipment giant, has struck a deal to acquire Splunk (NASDAQ: SPLK), a…
Cisco (NASDAQ: CSCO), an American IT and networking equipment giant, has struck a deal to acquire Splunk (NASDAQ: SPLK), a San Francisco-based cybersecurity software company. Cisco will pay $157 per share, or $28bn in cash, marking the biggest tech acquisition announced this year.
- Cisco is one of America’s largest technology companies, with a market capitalization of over $200bn. It’s best known as a networking equipment manufacturer but also has a booming cybersecurity business fuelled by acquisitions.
- Splunk sells software that allows enterprises to monitor and analyze their data to minimize cybersecurity risks and fix technical issues faster. It was founded in 2003 and debuted on the public markets in 2012.
Splunk’s sale to Cisco isn’t shocking. Last year, the Wall Street Journal reported that Cisco approached Splunk with a $20bn+ offer, but the talks weren’t finalized.
It appears that Cisco was keen on acquiring Splunk enough to offer $28bn, a 32% premium to Splunk’s closing market value on Wednesday. At $28bn, Splunk represents Cisco’s biggest acquisition in its four decades of existence.
- Splunk reported $3.7bn in revenue in its last fiscal year ended January 2023, compared to $2.7bn in the previous year. The company posted a $277mn net loss in the same period, down from $1.3bn in the previous year.
- Cisco reported $12.6bn in net income on $57bn in revenue in its last fiscal year ended July 2023.
Cisco expects the acquisition to close by the first quarter of next year. Upon closing, Splunk President and CEO Gary Steele will join Cisco’s executive ranks and report to Cisco chief executive Chuck Robbins.
