Cisco has submitted a bid to acquire Splunk. The transaction value is approximately $20 billion
Cisco has submitted a bid to acquire Splunk. The transaction value is approximately $20 billion
According to the source, the offer was made recently. On the other hand, the companies did not have active talks about the acquisition.
Cisco Systems has made a $20 billion takeover bid for software developer Splunk, the Wall Street Journal reports. This will be the largest acquisition in the history of network giant Cisco.
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Splunk is currently looking for a CEO after Doug Merritt resigned in November after nearly six years of disappointing earnings reports. The company has appointed Graham Smith as interim CEO.
Splunk’s stock rose sharply at the start of the pandemic, as did shares in many other high-growth technology companies, but has since fallen by nearly half. It’s also unclear if other companies are hovering over Splunk and considering an acquisition.
Splink going to Cisco?
Founded in 2003, Splunk develops software that companies use in their IT and security operations to monitor and analyze data. Headquartered in San Jose, California and run by CEO Chuck Robbins, Cisco sells routers, switches, and security services, as well as software like the Webex meeting app. It already collaborates on data security with Splunk.
In September last year, Cisco announced that it would focus more on software. This is manifested, inter alia, by introducing new financial indicators as well as overhauling reporting segments to show in detail the evolution of your software business.
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Software sales accounted for 30% of Cisco’s total revenue in fiscal year 2021. The company says it wants subscriptions to generate 50% of annual revenue in fiscal year 2025. Cisco also reported $49.8 billion in annual revenue, an increase of 1%. Net income was $10.6 billion, down 6%.
The interest in Cisco shows that the network giant — a chain buyer but usually smaller companies — has an appetite for a big deal.
Cisco won’t be the only technology company with a long history of rapidly expanding through acquisitions. Microsoft in January agreed to buy Activision Blizzard Inc. for the manufacture of video games. for about $75 billion. In December, Oracle Corp. agreed to buy Cerner Corp. , an electronic and medical records company, for more than $28 billion, in its largest-ever deal.
