• Cryptocurrency
  • Earnings
  • Enterprise
  • About TechBooky
  • Submit Article
  • Advertise Here
  • Contact Us
TechBooky
  • African
  • AI
  • Metaverse
  • Gadgets
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
  • African
  • AI
  • Metaverse
  • Gadgets
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
TechBooky
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Cisco Acquires Cybersecurity Firm Splunk in $28 Billion Cash Deal

Paul Balo by Paul Balo
September 22, 2023
in Uncategorised
Share on FacebookShare on Twitter
                                                         Image Source: MarketWatch

Networking equipment giant Cisco is set to acquire cybersecurity software firm Splunk for a cash deal valued at approximately $28 billion. This move marks Cisco’s largest acquisition to date.

Splunk specializes in helping businesses monitor and analyse their data, enabling them to mitigate hacking risks and resolve technical issues more efficiently. While Splunk shares surged by 21% in response to the announcement, Cisco’s shares experienced a 4% drop.

Cisco’s CEO, Chuck Robbins, highlighted the significance of artificial intelligence in cybersecurity, emphasizing the power of AI within Splunk’s technology to enhance network protection. He stated, “Our combined capabilities will drive the next generation of AI-enabled security and observability. From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”

The acquisition is anticipated to conclude in the third quarter of 2024, with Cisco expecting improvements in gross margins within the first year and non-GAAP earnings within the second year.

This purchase amounts to roughly 13% of Cisco’s market capitalization, marking a significant shift for the company, which has traditionally steered clear of blockbuster acquisitions. Prior to Splunk, Cisco’s most substantial deal was its $6.9 billion acquisition of cable set-top box manufacturer Scientific Atlanta in 2006, when the company’s market cap was just over $100 billion.

However, as the public cloud has increasingly encroached upon Cisco’s traditional back-end business, the company has sought new, substantial sources of revenue, with a primary focus on cybersecurity.

In the fiscal year 2022, Cisco rebranded its core switching and routing business from Infrastructure Platforms to Secure, Agile Networks, emphasizing the integration of security into networking equipment. The company also established a separate reporting unit called End-to-End Security, dedicated exclusively to security products. Consequently, revenue in the core business surged by 22% to $29.1 billion in the fiscal year ending July 29, while the security unit achieved a 4% increase, totalling $3.9 billion in sales.

Despite these strategic moves, Cisco shares have underperformed the Nasdaq, with a 12% rise compared to the tech-heavy index’s 27% increase this year. Over the past five years, Cisco’s stock performance has lagged even further behind the broader sector, with a mere 10% gain compared to the Nasdaq’s impressive 66% growth.

Cisco’s CEO, Robbins, anticipates that organizational synergies between Cisco and Splunk will become evident within the next 12 to 18 months. The company intends to finance the acquisition through a combination of cash and debt.

However, some analysts have voiced concerns regarding potential product overlap, regulatory scrutiny, and the price paid by Cisco. Ittai Kidron of Oppenheimer noted that Splunk’s transition to the cloud has been “underwhelming.”

In recent years, Splunk shifted its focus from an on-premises “customer-managed” approach to prioritize cloud-based offerings. Gary Steele, CEO of Splunk, who will join Cisco’s executive team post-acquisition, acknowledged that many large customers still rely on the capabilities offered in a customer-managed environment.

Should the deal fall through or be blocked by regulators, Cisco will be obligated to pay Splunk a termination fee of $1.48 billion, as stated in regulatory filings. Conversely, if Splunk decides to abandon the deal, it will be required to pay a $1 billion breakup fee to Cisco.

In 2023, Cisco acquired four security-focused companies: Armorblox (a threat detection platform), Oort (specializing in identity management), and Valtix and Lightspin (both in cloud security).

Tidal Partners, Simpson Thacher, and Cravath, Swaine & Moore advised Cisco on the acquisition, while Qatalyst Partners, Morgan Stanley, and Skadden, Arps, Slate, Meagher & Flom advised Splunk.

Related Posts:

  • Cisco Issues Impressive First Quarter Earnings Results And Strong Outlook For Fiscal 2023
    Cisco Issues Impressive First Quarter Earnings…
  • Cisco Reports Fiscal Fourth Quarter Earnings Results, Issues Better-than-expected Guidance For Its Full 2023 Fiscal Year
    Cisco Reports Fiscal Fourth Quarter Earnings…
  • router-595x335_0
    US And UK Warn Of Custom Malware Vulnerability On…
  • B01_Zenith-Heights-Head-Office-Building-of-Zenith-Ban_RT
    5 Nigerian banks' N178bn Tech Splurge: What you Need to Know
  • The Liquid C&C Cybersecurity Fusion Centre is set to put Microsoft Data Centre Out of Business.
    The Liquid C&C Cybersecurity Fusion Centre is…
  • Digital-Immune-System-How-it-Shields-Your-Business-Against-Cyberattacks-02-scaled
    Digital Immune Systems and Real-World Case Studies…
  • wiz-logo
    Google Cloud’s $32B Wiz Acquisition Reshapes Cybersecurity
  • Instacart's Strong Nasdaq Debut Sees 12% Stock Surge…

Discover more from TechBooky

Subscribe to get the latest posts sent to your email.

Paul Balo

Paul Balo

Paul Balo is the founder of TechBooky and a highly skilled wireless communications professional with a strong background in cloud computing, offering extensive experience in designing, implementing, and managing wireless communication systems.

BROWSE BY CATEGORIES

Select Category

    Receive top tech news directly in your inbox

    subscription from
    Loading

    Freshly Squeezed

    • Walmart Spent $580M on Microsoft Azure in 11 Months, Leak Shows May 30, 2025
    • Texas Signs Internet Regulations Targeting Apple & Google May 30, 2025
    • Chris Rogers Named New CEO of Instacart May 29, 2025
    • Spotify Adds New Features To Enhance Podcast Discovery May 29, 2025
    • FG Unveils Digital Village in Abuja with Free Internet May 29, 2025
    • Vital Lifeline: 9mobile to Launch MTN Roaming Partnership in June May 29, 2025

    Browse Archives

    May 2025
    MTWTFSS
     1234
    567891011
    12131415161718
    19202122232425
    262728293031 
    « Apr    

    Quick Links

    • About TechBooky
    • Advertise Here
    • Contact us
    • Submit Article
    • Privacy Policy
    • Login

    © 2021 Design By Tech Booky Elite

    Generic selectors
    Exact matches only
    Search in title
    Search in content
    Post Type Selectors
    • African
    • Artificial Intelligence
    • Gadgets
    • Metaverse
    • Tips
    • About TechBooky
    • Advertise Here
    • Submit Article
    • Contact us

    © 2021 Design By Tech Booky Elite

    Discover more from TechBooky

    Subscribe now to keep reading and get access to the full archive.

    Continue reading

    We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.Ok