Splunk logo displayed on a phone screen and a laptop keyboard are seen in this illustration photo taken in Krakow, Poland on October 30, 2021. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
Jakub Porzycki | Nurphoto | Getty Images
Cisco said it Thursday was acquiring cybersecurity software company Splunk for $157 a share in a cash deal worth about $28 billion.
Splunk shares, which last closed at $119.59 a share, were halted. Cisco lost 4% in premarket trading.
“From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient,” Cisco chair and CEO Chuck Robbins said in a statement.
Cisco expects the deal to be cash flow positive and gross margin accretive in the first year following the closing of the acquisition; it will be accretive to Cisco’s non-GAAP earnings per share by the second year.
“Together, we will become one of the largest software companies globally,” Robbins said in a conference call with analysts.
Splunk is a cybersecurity company that helps enterprises monitor and analyze their data to minimize the risk of hacks and resolve technical issues faster. Cisco makes and sells telecommunications and networking equipment, as well as a complementary suite of of software.
If Cisco backs out of the deal or is forced to do so because of regulatory intervention, it will pay Splunk a termination fee of $1.48 billion, according to a regulatory filing. If Splunk backs out of the deal for any reason, it will pay a $1 billion breakup fee to Cisco.
Tidal Partners, Simpson Thacher, and Cravath, Swaine & Moore advised Cisco. Qatalyst Partners, Morgan Stanley, and Skadden, Arps, Slate, Meagher & Flom advised Splunk.
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