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Data Firm Splunk to Join Cisco for $28 Billion

September 25 2023

Connectivity giant Cisco is to splash out $28bn in cash to acquire Splunk, which focuses on cybersecurity, data analytics and observability.

Splunk's Gary SteeleThe deal creates 'one of the world's largest software companies' as Cisco - originally the networking hardware company providing the backbone of the Internet - continues to adjust its business focus to include more recurring revenue. Allied with Cisco, Splunk's technology will help clients to move 'from threat detection and response to threat prediction and prevention' according to the firms, and the combination leaves them 'well positioned to lead in security and observability in the age of AI'.

San Francisco-based Splunk has also moved with the times. Ten years ago following an IPO it described its offering as software to collect, index and harness big data from web sites, apps, servers, networks, sensors and mobile devices. It's still developing its machine learning systems to do this, but puts more focus on identifying patterns in the data to flag up potential problems: it aims 'to build a safer and more resilient digital world' by helping customers 'to prevent security, infrastructure and application issues from becoming major incidents, absorb shocks from digital disruptions, and accelerate digital transformation'.

Splunk has almost $4 billion in annual revenue and around 8,000 employees. The deal sees Cisco pay $157 per Splunk share in cash - around 8% above current market price. The buyer has just announced strong growth, has a healthy balance sheet and can, according to analysts, afford more than 90% of the purchase price with current reserves - raising the rest should be comfortable over the twelve months the deal will take to complete.

Splunk President and CEO Gary Steele (pictured) will join Cisco's Executive Leadership Team, reporting to Chair and CEO Chuck Robbins who comments: '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 will help make organizations of all sizes more secure and resilient'. Steele adds: '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'.

The buy has been unanimously approved by both companies' boards of directors, and 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.

Web sites are at www.cisco.com and www.splunk.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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