Networking equipment giant Cisco Systems said Thursday it would acquire Splunk , a cybersecurity and data analytics software company, for $157 a share in cash in a deal with an enterprise value of about $28 billion.
“We’re excited to bring Cisco and Splunk together. Our combined capabilities will drive the next generation of AI-enabled security and observability,” said Cisco CEO Chuck Robbins in the release. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
Cisco (ticker: CSCO) shares were falling 4.8% to $52.84 in premarket trading. Splunk (SPLK) surged 20% to $143.26. It closed Wednesday at $119.59.
Cisco said the acquisition is expected to be cash flow positive and gross margin accretive in the first fiscal year after close and adjusted earnings accretive in the second year. It should also boost Cisco’s revenue growth and gross margin expansion.
The acquisition was unanimously approved by the boards of both companies and is expected to close by the end of the third quarter of 2024. It will not impact Cisco’s previously announced share buyback program or dividend program, the company said.
“Cisco acquiring Splunk. This is an easy one,” wrote Patrick Moorhead, founder of Moor Insights & Strategy on X, formerly known as Twitter. “Will create an observability capability and an even bigger security giant.”
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