Amercian tech giant Cisco, which is known for building itself via acquisitions, announced the that it is acquiring cybersecurity platform Splunk for $28 billion in cash. As per the deal, Splunk is paying a hefty premium of $157 per share. This deal is expected to be closed by the end of the third quarter of 2024. Notably, this move marks Cisco’s largest acquisition to date while its previous biggest deal was the $6.9 billion purchase of cable set-top box maker Scientific Atlanta in 2006.
So far in 2023, Cisco has acquired four companies focused on security. This includes Armorblox, a threat detection platform, Oort, which does identity management, and Valtix and Lightspin, both involved in cloud security.
Post this announcement, Splunk’s shares surged by 21% while Cisco’s shares dropped by 4%. Cisco announced that it should improve gross margins in the first year and non-GAAP earnings in year two. As a result of this acquisition, Splunk President and CEO Gary Steele will join Cisco’s Executive leadership team and will report to Chair and CEO Chuck Robbins.
Cisco bets big on adoption of AI
In today’s hyper-connected world, data is everywhere and organisations rely 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 organisations have faced. Organisations need a better way to manage, protect, and unlock data’s true value and stay digitally resilient. With Splunk in its kitty, Cisco plans to address these challenges.
The acquisition builds on Splunk helps organisations enhance their digital resilience and will accelerate Cisco’s strategy to securely connect everything to make anything possible. The combination of these established leaders in AI, security and observability will help make organisations of all sizes more secure and digitally resilient. Also, the union of these two companies will allow for greater investments in new solutions, accelerated innovation, and increased global scale to support the needs of customers of all sizes.
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Chuck Robbins, chair and CEO of Cisco. “From threat detection and response to threat prediction and prevention, we will help make organisations of all sizes more secure and resilient.”
“Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organisations worldwide become more resilient, while delivering immediate and compelling value to our shareholders,” said Gary Steele, president and CEO of Splunk.