Cisco to acquire Splunk to drive next gen of AI-enabled security and observability

Cisco (NASDAQ: CSCO) and Splunk (NASDAQ: SPLK), a cybersecurity and observability forerunner, have declared a binding contract where the former is set to purchase the latter for $157 per share in cash. This translates to an approximate equity value of $28 billion.

Key Details:

Leadership Transition: Once the acquisition is concluded, Splunk’s President and CEO, Gary Steele, will be incorporated into Cisco’s Executive Leadership, directly reporting to Chair and CEO Chuck Robbins.

Shared Vision: The acquisition accentuates Splunk’s digital resilience legacy, simultaneously bolstering Cisco’s vision of securely bridging every entity to manifest endless possibilities.

$28B deal: Cisco’s bold move to secure Splunk acquisition. Photo courtesy of Kjetil Ree/Wikimedia Commons.

Strengthening the AI, Security, and Observability Landscape

Chuck Robbins, chair and CEO of Cisco, expressed, “We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we aim to fortify organizations of all dimensions.”

Echoing the enthusiasm, Gary Steele, president and CEO of Splunk, articulated, “Uniting with Cisco represents Splunk’s growth trajectory, amplifying our global mission of resilience. We foresee this collaboration as a monumental step to revolutionize the security and observability sector using data-driven AI. Partnering with Cisco promises enhanced opportunities for the Splunk community and employees, marrying two organizations grounded in innovation and superior customer experiences.”

Tackling Modern Data Complexities

In today’s data-saturated realm, organizations grapple with data complexities that hinge on generative AI, mounting threat landscapes, and diverse cloud ecosystems. Cisco and Splunk’s amalgamation is poised to directly address these multifaceted challenges.

Their combined prowess in AI, security, and observability promises to decipher data’s inherent value, fortifying organizations’ digital resilience. Further, Splunk’s advanced security solutions will seamlessly integrate with Cisco’s established offerings, orchestrating top-tier security analytics from devices to expansive cloud networks.

With the merging of Cisco and Splunk, customers can anticipate unparalleled observability across intricate cloud terrains, optimizing digital business application experiences. These tech giants, anchored in trust and scalability, are uniquely positioned to empower clients in leveraging AI responsibly.

This merger paves the way for significant investments in novel solutions, fostering accelerated innovations and expanding global reach to cater to diverse client needs.

Transaction Breakdown

Splunk’s acquisition by Cisco encompasses a $157 cash-per-share deal, echoing an equity value of approximately $28 billion. Financial projections indicate this transaction will boost Cisco’s revenue growth, gross margin expansion, and cash flow. This purchase, approved unanimously by both entities’ boards, is set to conclude by Q3 2024, contingent upon regulatory endorsements, Splunk shareholder approvals, and other standard conditions.

For a comprehensive understanding of the agreement’s terms, stakeholders are directed to Cisco’s imminent Form 8-K report pertaining to this transaction.

Advisory Roles

Tidal Partners LLC, Simpson Thacher & Bartlett LLP, and Cravath, Swaine & Moore LLP are guiding Cisco, while Qatalyst Partners, Morgan Stanley & Co. LLC, and Skadden, Arps, Slate, Meagher & Flom LLP are acting in advisory capacities for Splunk.