Cisco Systems is shaking up the IT landscape today with its blockbuster $28 billion acquisition of Splunk, the largest acquisition in the networking giant’s history.
The San Jose, Calif.-based company has massive plans for Splunk—from transforming Cisco into a software subscription company, to driving the “next generation of AI-enabled security and observability” for organizations across the globe, says Cisco CEO and chairman Chuck Robbins.
“This is truly a historic day for Cisco,” said Robbins in a blog post today. “Together, we will bring trusted innovation leadership, an outstanding go-to-market engine, and a world-class culture that will help our customers move with greater speed to rapidly unlock new opportunities ahead.”
[Related: 9 In 9 Months: Here Are The Cisco Acquisitions So Far In 2023]
Cisco touts Splunk—which in its fiscal 2024 second quarter achieved an annual revenue run rate that exceeds $3.64 billion—as a worldwide leader in cybersecurity, software and observability.
“We’re bringing together two powerful innovation engines to create one of the world’s largest software companies, and together we will help make organizations more resilient and secure in an AI-powered world,” said Robbins.
Before jumping into Cisco’s integration plans and strategy for Splunk, let’s first look at the terms of the deal.
Cisco plans to acquire San Francisco-based Splunk for $157 per share in cash. This share price represents approximately $28 billion in equity value. The acquisition has been unanimously approved by the boards of directors of both Cisco and Splunk.
Cisco said it plans to close its $28 billion acquisition of Splunk by the end of the third quarter of calendar year 2024. The deal is still subject to regulatory approval and needs the approval by Splunk shareholders. Cisco said the transaction is expected to be cash flow positive and gross margin accretive in the first fiscal year post-close. Additionally, Cisco said Splunk will accelerate Cisco’s revenue growth and overall gross margin.
Here are the five biggest things customers, channel partners and investors need to know about Cisco’s historic acquisition of Splunk: from where CEO Gary Steele will end up to integration strategies.
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Mark Haranas is an assistant news editor and longtime journalist now covering cloud, multicloud, software, SaaS and channel partners at CRN. He speaks with world-renown CEOs and IT experts as well as covering breaking news and live events while also managing several CRN reporters. He can be reached at [email protected].
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