Cisco to Acquire Splunk

• Together, Cisco and Splunk will help move organizations from threat detection and response to threat prediction and prevention
• Combined, they will become one of the world’s largest software companies and will accelerate Cisco’s business transformation to more recurring revenue
• Expected to be cash flow positive and gross margin accretive in 1st fiscal year post close, and non-GAAP EPS accretive in year 2. Will accelerate revenue growth and gross margin expansion
• Unites two “Great Places to Work” with similar values, strong cultures, and talented teams
• The combination of these 2 firms makes them well positioned to lead in security and observability in the age of AI

Cisco Systems, Inc. and Splunk, Inc., in cybersecurity and observability, announced a definitive agreement under which Cisco intends to acquire Splunk for $157 per share in cash, representing approximately $28 billion 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.

The acquisition builds on Splunk’s heritage of helping organizations enhance their digital resilience and will accelerate Cisco’s strategy to securely connect everything to make anything possible. The combination of these 2 firms 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 gen 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 organizations 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 organizations.”

In today’s hyperconnected world, data is everywhere, with every organization relying on it to run their business and make mission-critical decisions every day. Factoring in the acceleration and adoption of generative AI, expanding threat surfaces, and multiple cloud environments, it creates a level of complexity that is unlike anything organizations have faced. Organizations need a better way to manage, protect, and unlock data’s true value and stay digitally resilient.

Together, the 2 companies will address these challenges head on.

The combination of these 2 firms 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 security analytics and coverage from devices to applications to clouds.

The 2 companies’ 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. They 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 2 organizations will allow for greater investments in new solutions, accelerated innovation, and increased global scale to support the needs of customers of all sizes.

This acquisition will also build upon both companies’ reputations for being purpose-driven with similar values, cultures, and talented teams. The acquisition will unite 2 “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.

Transaction details
Under the terms of the agreement, 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 transaction will not impact Cisco’s previously announced share buyback program or dividend program.

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 2CQ24, subject to regulatory approval and other customary closing conditions including approval by Splunk shareholders.

Advisors
Tidal Partners LLC is acting as financial advisor to Cisco, Simpson Thacher & Bartlett LLP is acting as legal counsel, and Cravath, Swaine & Moore LLP is acting as regulatory counsel. Qatalyst Partners and Morgan Stanley & Co. LLC are acting as financial advisors to Splunk and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.