The reported deal would be the largest price tag for Cisco, which is no stranger to technology acquisitions. L Brands' plan was to spin its Bath & Body Works brand off into a stand-alone company and sell its lagging Victoria's Secret/Pink brands to the highest bidder. The Silicon Valley-based tech investor recently plopped $1 billion down on Splunk, a significant cash infusion given Splunk's current enterprise value sits at $23 billion. Cisco Has Discussed Deal for Software Company Splunk, https://www.nytimes.com/2022/02/11/technology/cisco-splunk.html. Splunks stock price fell 20% over a six-month period, and the company. News Corp is a global, diversified media and information services company focused on creating and distributing authoritative and engaging content and other products and services. Ciscos acquisition offer shows us that cybersecurity will continue to be a key driver of mergers and acquisitions (M&A) in 2022. As a shareholder, I'm certainly hoping Splunk holds out for a higher price. Accelerate value with our powerful partner ecosystem. Network gear maker Cisco Systems Inc has made a takeover offer worth more than $20 billion for software maker Splunk Inc , the Wall Street Journal reported on Friday, citing people familiar with . It's pretty likely Silver Lake didn't invest in Splunk to make 0.75%, but rather to make big money on the conversion. Never Miss a Revenue Moment With Intent and Pre-Intent Data, 10 Actionable Data Trends in 2023 To Nail Your Analytics, How Technology Is Digitally Transforming Ad Operations, Three Ways Enterprise Architecture is Driving Digital Transformation, Seed-stage Companies Can Create FOMO to Gain an Edge in Fundraising, Correcting the Course of Failed Climate-conscious Planning with AI, Cloud Cost Optimization as a Lever Against Inflationary Pressure, How Simulations Can Help Us Solve the Climate Crisis in a Way That Benefits Everyone. All quotes delayed a minimum of 15 minutes. Graham V. Smith, the chairman of Splunks board, is currently serving as interim CEO to fill the leadership void. Splunks acquisition of Rigor adds a unique Digital Experience Management (DEM) platform that combines the power of synthetic monitoring with intelligent optimization engine capabilities to enhance Splunk's Observability solutions. A deal may not happen at all, but if talks resume, Cisco could pay more than $20 billion for Splunk, one of the people said. Splunk's software collects data logs and can give an enterprise added insight into operations, security, and application performance. . Splunk The $19.67 billion data-analytics company Splunk has had its ups and downs. Will Townsend. The Leading Resource on Next-Generation IT Infrastructure. A spoksperson for Splunk cited its policy not to comment on rumors or speculation. We've been tracking company news on mergers and acquisitions since 1999. Jun 11, 2018 . Customer success starts with data success. Splunk jumped up 16 percent post-market on reports of the takeover bid. Dropbox is a 9.3 billion market cap company. During the years prior going back to 2017, Cisco closed between . Transform your business in the cloud with Splunk. List of Splunk 's 16 Acquisitions, including TwinWave and TruSTAR. Ciscos planned acquisition of Splunk has received favorable reactions from industry analysts. While the offer from Cisco is a nice indicator of Splunk's value, as a Splunk shareholder, I really hope management rejects the offer or demands a much higher price. Splunk Application Performance Monitoring, EX-101.SCH - XBRL TAXONOMY EXTENSION SCHEMA. Cisco did not immediately respond to a request for comment, while a spokesperson for Splunk said the company did not comment on rumors or speculation. Ciscos offer comes when Splunk is actively hunting for a new CEO following former president and CEO Doug Merritts departure in November 2021. The biggest was IBM's $34 billion purchase of Red Hat in 2018, followed by Microsoft's $27 billion acquisition of LinkedIn in . Cisco, a leader in unified access security and multifactor authentication thanks to its 2018 $2.35 billion Duo Security buy, could be complimented by Splunks strength around security operations, which the company came by from its own 2018 acquisition of Phantom Cyber, a company specializing in security orchestration, automation and response capabilities. Cisco did not immediately respond to a request for comment. Let us know if you enjoyed reading this news on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window . Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Companies Contacts Investors Funding Rounds Acquisitions People Events Schools Hubs Saved . Cisco Systems Inc. has made a takeover offer worth more than $20 billion for software maker Splunk Inc., according to people familiar with the matter, in what would be the networking giants biggest acquisition ever. As a reminder, debt converted into new stock dilutes ownership for existing shareholders. As I see it, Splunks presence in the security and observability space would be an incredibly attractive addition to Ciscos existing solutions, while adding a substantial cloud and recurring revenue-based business to the companys top line, said Daniel Newman, Futurums principal analyst. Splunk's $1 billion cash windfall gets it access to some cheap capital -- at least cheap in the short-term. It's had to adapt its suite of services and the way it bills customers for this new cloud era. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Such a deal would be the largest ever for Cisco . Cisco is using acquisitions to help it grow . As I see it, Splunks presence in the security and observability space would be an incredibly attractive addition to Ciscos existing solutions, while adding a substantial cloud and recurring revenue-based business to the companys top line.. The Motley Fool owns shares of and recommends Datadog and Splunk. As of this writing, shares are down nearly 30% over the last 12-month stretch compared to a 36% run for the S&P 500. The site owner may have set restrictions that prevent you from accessing the site. Sep 12, 2021. Splunk named after spelunking, the sport of cave exploring mines data for insights, including security threats, a business that grew in importance as the coronavirus pandemic quickly forced many workers online. Data is a real-time snapshot *Data is delayed at least 15 minutes. And Kurian an Oracle veteran knows how to . But the advent of the cloud has shifted these needs away from legacy IT systems, and Splunk wasn't exactly ready for the change. Just to provide a sense of the activity, Cisco conducted nine acquisitions in 2020, six in 2021, and has conducted one YTD in 2022. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. San Jose, CA-headquartered Cisco Systems, Inc. has reportedly offered $20 billion-plus to acquire data analytics giant Splunk. People close to the company said the talks occurred recently, according to the Journal. He said mergers such as Invesco's 2019 acquisition of OppenheimerFunds, Janus's 2017 deal with Henderson, and even 2020 Franklin Templeton's merger with Legg . Splunks acquisition of KryptonCloud expands Splunks ability to innovate for IoT use cases with our market-leading machine data platform. Splunks acquisition of Drastin expands Splunks search-driven analytics capabilities and enhances our ability to provide an intuitive search experience for our customers. We continue to see incredibly strong demand across our portfolio, emphasizing the criticality and relevance of Ciscos innovation. Cisco Systems (NASDAQ: CSCO) offered to acquire Splunk (NASDAQ: SPLK) for more than $20 billion, the Wall Street Journal reported citing people familiar with the matter. The Wall Street Journal reported that Cisco offered the data observability and security information and event management (SIEM) provider $20 billion. Accelerate value with our powerful partner ecosystem. This growth and its corner on a key market segment continue to make Splunk an attractive acquisition for Cisco, he said. Splunk Inc. is an American software company based in San Francisco, California, California, that produces software for searching, monitoring, and analyzing machine-generated data via a Web-style interface. Our servers do not recognize your request. Splunk vs Uber I got the final offer from Splunk (P4: 230k, 15%, 440k/3yrs, TC=411k), probably the highest offer for P4. Deliver the innovative and seamless experiences your customers expect. acquisition-related adjustments, amortization of intangible assets and . Microsoft CEO Satya Nadella has been going on a major shopping spree. You can see Splunk's revenue took a dip in 2020 as it went through the trough of this transition. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Oct 20, 2020 . Get this delivered to your inbox, and more info about our products and services. We are constantly evaluating potential opportunities. Head over to the Spiceworks Community to find answers. The report about said discussions comes not long after Microsoft's mammoth $70 . It will also affirm Ciscos projected dominance in the sector in the years ahead. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Splunk has been in the process of shifting toward providing cloud services to customers, and said in December that almost 37% of revenue in the latest quarter was tied to cloud usage. Splunks acquisition of SignalSense enables Splunk to further innovate in our market-leading machine data platform and expands Splunks expertise in machine learning and cloud applications. When submitting your ticket, please include the RayID detailed below for a faster resolution. Daily chart of Splunk stock. Cisco is known as a serial acquirer, effectively using acquisitions as a complement to research and development. Silver Lake Chairman and Managing Partner Kenneth Hao will also join Splunk's board of directors to help guide the company's journey. The announcement marks a return to M&A activity for Splunk and the massive $1.05 billion deal for SignalFX in 2019. It will also affirm Ciscos projected dominance in the sector in the years ahead. Billy Duberstein owns Amazon and Splunk. Read the Wall Street Journal report here. Splunk, for its part, plans to use the cash to continue to transform its business for the cloud era. Ciscos growth is bogged down by a lack of foothold in the cloud-based subscription space which offers great promise for the future. But looking under the hood to ARR and the cloud segment shows a much better growth picture. Give . The industry leader for online information for tax, accounting and finance professionals. Making the world smarter, happier, and richer. For many organizations, 2020 has been a year of cutting costs and staying afloat amid a turbulent market. Precept is a leading multimedia networking software company. Splunks acquisition of Metafor expands our capabilities in IT operations and security incident and event management (SIEM) by adding machine learning and anomaly detection to our solutions, which helps customers detect unknown and malicious threats. Now there are reports Microsoft is looking to buy Mandiant, the cybersecurity software firm formerly known as FireEye that is . Listen to article. Palo Alto also bought security orchestration, automation and response player Demisto, a direct competitor of Phantom, in 2019 for $560 million. Senior Assistant Editor, Spiceworks Ziff Davis, Ciscos $20 billion acquisition offer, which is $13 billion more than its highest acquisition ever, comes after the company. Splunks acquisition of VictorOps adds collaborative incident management capabilities to Splunks portfolio and creates an analytics-driven Platform of Engagement for DevOps and IT customers to better prevent and resolve incidents. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Its chief executive, Chuck Robbins, told analysts in December that Cisco would continue to look for acquisitions in security. These are the highest quality stocks in the S&P 500 that could win in this volatile market, This growth ETF is leaving one of its top competitors in the dust. The offer was made recently and the companies are not in active talks, the newspaper said, citing some of the sources. So, headline revenue numbers may be misleading, giving the impression Splunk is lagging behind cloud-native upstarts such as Dynatraceand Datadog. Our robust order strength, record backlog and double-digit growth in annual recurring revenue position us well to deliver growth, said Chuck Robbins, chair and CEO of Cisco. Requested URL: www.sdxcentral.com/articles/analysis/who-will-cisco-buy-instead-of-splunk/2022/02/, User-Agent: Mozilla/5.0 (Windows NT 6.1; Win64; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/103.0.0.0 Safari/537.36. Discover what Splunk is doing to bridge the data divide. SDxCentral employs cookies to improve your experience on our site, to analyze traffic and performance, and to serve personalized content and advertising relevant to your professional interests. Read more . According to Newman, Splunk underwent a rough phase in 2021, losing its CEO and witnessing its stock price taking a tumble, but the company still packs a punch and offers a lot of value to potential buyers. (1 minute) Cisco Systems Inc. has made a takeover offer worth more than $20 billion for software maker Splunk Inc., according to people familiar with the matter, in what would . and is author of the Entrepreneur Journeys book series and Vision India 2020. Ciscos Bold Move to Boost Cybersecurity M&As in 2022, Sapana Maheria, practice head of Thematic Research at GlobalData, believes that if the acquisition goes through, it will. Microsoft's acquisition of B's parent company for $7.5 billion in March of this year shocked the gaming industry and raised the level of XBOX's camp. In a note to investors, Morgan Stanley analyst Meta Marshall said the Splunk acquisition would help Cisco offer stiff competition to industry leaders in the cybersecurity space. Additionally, cloud revenue has a lower gross margin than term software licenses, but that's generally made up for in higher growth. You may cancel your subscription at anytime by calling Cisco Sues Acacia Over Termination of $2.6B Merger Deal, Cisco Revamps Webex People Insights To Meet Hybrid Workplace Needs, Cisco Breaks Into CXaaS Market With Two Acquisitions, VMware and Cisco Continue To Battle for SD-WAN Supremacy. However, now it's coming through the other end of it: Even though Splunk is now past the bottom of the transition, revenue growth according to generally accepted accounting principles (GAAP) is still lagging behind the real recurring top line the company is taking in. Sign In. Splunk's software collects, analyzes and visualizes real-time and historical machine data from any source. Here are 12 other startups analysts say it could buy to fend off competitors. Splunk shares rose as much as 14% in extended trading after a report about an acquisition offer from Cisco. You can manage your preferences at any time. Cost basis and return based on previous market day close. Cisco Systems, the technology conglomerate, has held discussions with the software company Splunk about buying it, although no deal is currently on the table, two people familiar with the matter told The New York Times on Friday. In 2020, asset management went on a shopping spree. This includes computing devices, control systems, sensors, or anything else connected . Splunk Application Performance Monitoring. A 24/7 Wall St. analysis reveals that the largest merger deal of the past two decades was worth more than $128 billion. In GlobalDatas thematic scorecard for application software, Splunk ranked fifth out of 45 companies, and the company also boasts a score of 5 out of 5 in the cybersecurity theme. Splunk's acquisition of TwinWave extends our security leadership and adds capabilities to empower the security analyst with cloud-native, automated threat analysis for phishing and malware. Though the two companies didnt react to the rumors for a few days after they surfaced, Chuck Robbins, Ciscos chairman and CEO, confirmed the developments during its Q2 earnings call. Alphabet certainly has the war chest for such deals. Reporting by Jahnavi Nidumolu and Juby Babu in Bengaluru; Editing by Leslie Adler, Richard Chang and Sandra Maler, Exclusive: Nvidia's plans for sales to Huawei imperiled if U.S. tightens Huawei curbs-draft, Mexico can't match U.S. incentives for proposed Tesla battery plant, minister says, Taiwan's TSMC to recruit 6,000 engineers in 2023, US prepares new rules on investment in technology abroad- WSJ, Exclusive news, data and analytics for financial market professionals. Even though its cloud revenues zoomed 77% in the year, its overall revenue was down 5% year-over-year, and its operating cash flow was negative $191 million with free cash flow of negative $228 million. The acquisition by Cisco could provide much-needed breathing space for the company to invest heavily in cloud, IT security, and data observability platforms and digital transformation initiatives in the year ahead. Should a deal for Splunk be consummated it would be by far Cisco's largest ever. The offer was . That certainly indicates the new cloud offerings are very successful with customers. IDC forecasts data creation and replication will grow at a 23% annualized growth rate from 2020 to 2025, and that acts as a powerful tailwind for the industry. According to a report by GlobalData, 24,689 deals were announced worldwide in H1 of 2020, which marks a 15% decline YoY. Pundits speculate that Google parent Alphabet could acquire ServiceNow, Atlassian, Splunk or perhaps Zayo.. Splunk is currently unprofitable, and the stock has been unable to bounce back from last year's challenges with this interest rate cloud hanging over it. With a price to sales ratio of 5.6. Doug Merritt, Splunk's CEO for the past six years, stepped down in November. maroon and black color combination Addiction rehab & recovery treatment programs for seniors senior-recovery.org Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 4. June 5. splunk acquisition rumors 2020 . With dominant position in multiple on-premise markets, Ciscos valuation has been held back by more gradual moves toward the cloud and the revenue transition from opex vs. capex focused IT. Shares of Splunk ( SPLK) - Get Free Report dropped Friday after the software developer disclosed that its chief technology officer, Tim Tully, would leave next month. Momentum Just Isn't Happening. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Splunk has acquired 14 companies, including 8 in the last 5 years.. Splunk's largest acquisition to date was in 2019, when it acquired SignalFx for $1.1B. Given that Silver Lake has a seat on the board of directors, it would probably be difficult for it to vote for any acquisition below that $160 price. The ongoing business model transition and growing competition at Splunk could present additional challenges for Cisco if they pursued this acquisition. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. This one was a gift for the core CRM product. Splunk, whose stock price has fallen by 30 percent since its chief executive, Doug Merritt, unexpectedly stepped down in November, has a market capitalization of around $18 billion. While the revenue has been growing consistently, it has not grown at especially remarkable rates. Cloud ARR was only just over one-third of total ARR in the last quarter, so there will likely be more variability in overall growth and profitability in the next couple of years as more customers make the switch. A data platform built for expansive data access, powerful analytics and automation, Cloud-powered insights for petabyte-scale data analytics across the hybrid cloud, Search, analysis and visualization for actionable insights from all of your data, Analytics-driven SIEM to quickly detect and respond to threats, Security orchestration, automation and response to supercharge your SOC, Instant visibility and accurate alerts for improved hybrid cloud performance, Full-fidelity tracing and always-on profiling to enhance app performance, AIOps, incident intelligence and full visibility to ensure service performance. Announcement Date: 6/6/2019. Customer Service. Cost basis and return based on previous market day close. The potential deal could position Cisco to compete with security leader Palo Alto Networks in the security operations space. Statement of changes in beneficial ownership of securities. These are used to let you login and to and ensure site security. To make the world smarter, happier, and richer. Splunk shares rose as much as 14% in extended trading after a report about an acquisition offer from Cisco. The Wall Street Journal reported the potential deal earlier on Friday. Adding to the complication is that Doug Merritt, Splunk's CEO over the past six years, resigned back in November, which sent the stock another leg down. 2020 - 20211 year. Gina Narcisi is a senior editor covering the networking and telecom markets for CRN.com. Alex Murdaughs Trial Lasted Six Weeks. Cloud annual recurring revenue (ARR) has been off to the races and was up 83% year over year in Q1 fiscal 2022 to $833 million, but these changes have throttled overall revenue expansion. Cisco was built on its leading position in enterprise hardware, but has made a big strategic effort to buy its way into the more stable software space. And cloud-based annualized recurring revenue grew 75%, with a cloud-based net retention rate of 130%. Sapana Maheria, practice head of Thematic Research at GlobalData, believes that if the acquisition goes through, it will bode wellOpens a new window for further big-ticket mergers and acquisitions in the cybersecurity sector in the year ahead, especially in the behavioral analytics space.
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