Cisco announced Thursday it will purchase Splunk, a cybersecurity and analytics firm, for $157 per share in cash or roughly $28 billion in equity value.
“Our combined capabilities will drive the next generation of AI-enabled security and observability,” Cisco CEO Chuck Robbins said in a statement. “From threat detection and response to threat prediction and prevention, we will help make organizations of all sizes more secure and resilient.”
The deal, which was approved by the boards of directors of both companies, comes as the industry faces a new wave of artificial intelligence technologies and increasing cybersecurity pitfalls.
“We will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry,” Splunk CEO Gary Steele said.
Cisco’s purchase will also factor in “the acceleration and adoption of generative AI, expanding threat surfaces, and multiple cloud environments.”
The acquisition is expected to close by the end of the third quarter of 2024.
The deal is also expected to be cash flow positive, gross margin accretive in the first year after the acquisition’s close and non-GAAP EPS accretive in the second year.
The transaction will not impact Cisco’s previously announced share buyback program or dividend program. Qatalyst Partners and Morgan Stanley are acting as financial advisers to Splunk.