September 27, 2023
Last week, Cisco, a California-based technology company announced its intention to acquire Splunk, a cybersecurity and observability firm. The proposed transaction represents approximately $28 billion in equity value, marking the largest acquisition for Cisco to date. The announcement is yet another example of a tech giant seeking to capitalize on the artificial intelligence boom.
The purchase price of $157 per share was a 31% increase from the company’s last closing price, providing a sizeable premium to Splunk’s shareholders and hinting that some competition for the acquisition occurred.
Having received approval from the board of directors of both Cisco and Splunk, the transaction is expected to close by the end of the third quarter of 2024. Commenting on the deal, Cisco Chair and CEO Chuck Robbins noted that uniting the companies’ capabilities will “drive the next generation of AI-enabled security and observability”, positioning them as a global leader in this sphere.
Noticing a spur of acquisitions by Cisco this year, it will be interesting to watch as Cisco balances the integration of new capabilities and personnel.
Author: Shea Neals, 2023/2024 Articling Student-at-Law