Cisco to Buy Splunk for $28 Billion
The acquisition is the largest deal ever for networking stalwart!
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@Cisco to Buy Splunk for $28 Billion in Giant AI-Powered Data Push, as Splunk shares soras after the announcement via Bloomberg#ai #data #Cisco pic.twitter.com/SIe6pDr21O
— The_Journalbiz (@the_journalbiz) September 21, 2023
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Cisco Systems Inc. agreed to buy Splunk Inc. in a deal valued at about $28 billion, representing its biggest acquisition yet and a massive push into software and artificial intelligence-powered data analysis.
- The networking giant will pay $157 a share in cash, the companies said in a statement Thursday, or a
- 31% premium to Splunk’s closing price on Wednesday. The purchase represents roughly 10% of Cisco’s market value.
Cisco has been trying to lessen its dependence on one-time sales of expensive hardware and shift toward software and services. Splunk is its most expensive push yet into that area and will help Cisco reach a broader base of customers, who can use the new services to gain insight into their network and computing operations.
The deal should be cash-flow positive in the first year after closing and add $4 billion in annual recurring revenue, Cisco Chief Financial Officer Scott Herren said on a conference call with analysts Thursday.
Splunk, based in San Francisco, is known for data observability services, which allow companies to monitor internal systems for network health, cybersecurity risks and other insights. It competes with companies like Datadog Inc. and Dynatrace Inc.
The deal is a bet on information technology departments increasing their investment in data management services, driven in part by economywide excitement in artificial intelligence.
