Cisco acquires Splunk in major tech merger

In a transaction settled at $157 for each share in cash, the networking behemoth acquired Splunk, a leader in data analytics, security, and observability solutions, a move that was initially made public in September 2023.

Cisco intends to integrate Splunk’s advanced capabilities in AI, security, and observability to enhance its own suite of solutions.

What’s the expected impact of the Cisco-Splunk merger?

Cisco anticipates that this acquisition will positively impact its cash flow and contribute to an increase in non-GAAP gross margin starting in fiscal year 2025, and it will be beneficial to non-GAAP EPS by fiscal year 2026.

Chuck Robbins, Chair and CEO of Cisco, expressed his enthusiasm about the acquisition: “We are thrilled to officially welcome Splunk to Cisco. As one of the world’s largest software companies, we will revolutionize the way our customers leverage data to connect and protect every aspect of their organization as we help power and protect the AI revolution.”

Finalizing the deal, initially disclosed on September 21, lays the groundwork for delivering unmatched visibility and insights throughout an organization’s comprehensive digital presence, as per the joint announcement from the companies.

Following the acquisition, Splunk’s shares were removed from NASDAQ’s listing before the market opened today (Image credit)

Gary Steele, formerly President and CEO of Splunk and currently serving as Cisco’s Executive Vice President and General Manager of Splunk, highlighted in the announcement:

“Uniting Splunk and Cisco will bring tremendous value to our joint customers worldwide. The combination of Cisco and Splunk will provide truly comprehensive visibility and insights across an organization’s entire digital footprint, delivering an unprecedented level of resilience through the most extensive and powerful security and observability product portfolio on the market.”

The merger of Cisco and Splunk “will bring the full power of the network, together with market-leading security and observability solutions, to deliver a real-time unified view of the entire digital landscape, helping teams proactively defend critical infrastructure, prevent outages, and refine the network experience,” the companies stated.

Furthermore, the companies have announced that “in the upcoming months, customers can anticipate a slew of innovative product developments throughout the portfolio, following Splunk’s integration,” highlighting a collaborative blog post from Robbins and Steele. They have also released a video on YouTube lasting 1 minute and 25 seconds that discusses the acquisition’s finalization.

Acknowledging the contribution of channel partners, the statement mentioned, “Cisco and Splunk also bring together global developer and partner communities with extensive experience extending security, observability, and data platform capabilities with pre-packaged applications and solutions for customers. Our collective partner ecosystem can create new profitable revenue streams through high-value services and by deploying innovative new applications and AI-powered solutions.”

Gary Steele, the President and CEO of Splunk, will now serve as Executive Vice President, General Manager of Splunk within Cisco, directly reporting to Robbins.

Following the acquisition, Splunk’s shares were removed from NASDAQ’s listing before the market opened today.

Featured image credit: Kerem Gülen/DALL-E 3