Cisco and Splunk have entered into a definitive agreement for Cisco to acquire Splunk for $157 per share in cash, representing approximately $28 billion in equity value. The acquisition will combine Cisco’s expertise in AI, security, and observability with Splunk’s capabilities in security analytics and coverage. The goal is to help organizations enhance their digital resilience and securely connect everything. Splunk President and CEO Gary Steele will join Cisco’s Executive Leadership Team after the acquisition closes. 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. The acquisition is subject to regulatory approval and is expected to close by the end of the third quarter of calendar year 2024.
The combination of Cisco and Splunk is expected to create one of the world’s largest software companies and accelerate Cisco’s business transformation to recurring revenue. It will also accelerate revenue growth and gross margin expansion for both companies. The acquisition will unite two “Great Places to Work” with similar values, strong cultures, and talented teams. Together, they aim to lead in security and observability in the age of AI.
In today’s hyperconnected world, organizations rely on data to run their businesses and make critical decisions. However, the complexity of managing and protecting data has increased with the adoption of generative AI, expanding threat surfaces, and multiple cloud environments. Cisco and Splunk believe that their combined capabilities will address these challenges and help organizations of all sizes become more secure and digitally resilient.
The transaction has been unanimously approved by the boards of directors of both companies. It will not impact Cisco’s previously announced share buyback program or dividend program. Tidal Partners LLC is acting as financial advisor to Cisco, while Simpson Thacher & Bartlett LLP and Cravath, Swaine & Moore LLP are acting as legal and regulatory counsel, respectively. Qatalyst Partners and Morgan Stanley & Co. LLC are acting as financial advisors to Splunk, while Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel.
The acquisition is expected to bring together two respected and purpose-driven organizations that are passionate about innovation and inclusion. Cisco and Splunk will continue to be great places to work and remain committed to delivering excellent customer outcomes. The transaction is expected to close by the end of the third quarter of calendar year 2024, pending regulatory approval and other customary closing conditions.