Cisco Acquires Splunk: Experts React to ‘Biggest Security Transaction Ever’

Cisco has reached an agreement to acquire US software maker Splunk for $28bn. 

Not only is this the biggest technology deal of 2023 so far in an otherwise quiet twelve months for M+A’s, but it also becomes the ‘biggest security transaction ever’ according to some experts. 

The deal, which broke on September 21, comes as Cisco seeks to build out its cybersecurity offering and increase its exposure to AI. 

Did not see that coming! At $28 billion it is the biggest security transaction ever. (If you categorize Splunk as "security.") If memory serves, this is Cisco's biggest transaction too.

Good news for Gravwell. :-) $157 a share seems generous. Trading down 1.25% in aftermarket at 7:30 AM, $118. Splunk revenue skyrocketed in Fiscal 2023 by $1 billion. But they have been losing money for a long time. The press release claims they expect to be EPS positive in year two. I believe they can pull that off.

Richard Stiennon, Chief Research Analyst at IT-Harvest

Both parties expect the deal to be finalised by Q4, 2024. That being said, the transaction is likely to attract the attention of antitrust regulators in Washington who have been particularly litigious of large tech sector deals in recent years. Any significant investigation into the deal by competition watchdogs could slow down proceedings.

Cybersecurity and investments experts have since taken to social media to give their thoughts on landmark deal. 

Zeus Kerravala, Founder and Principal Analyst at ZK Research said: "Holy observability! Cisco drops a cool $28B and picks up Splunk. In an #AI driven world, data is king and Splunk has lots of that! Improves Cisco security story as well. This has been rumored for a long time, Cisco making it happen now!"

Matt Boon, Senior Director - Strategic Research at ADAPT said: "I do see this as a positive for the Cisco ecosystem and customer base in general, communication as to how this can differentiate Cisco at the data, observability, and security level is of course important. The challenge for Cisco is to make sure the Splunk ecosystem, internally and externally sees this as a positive."

Jake Marshak, Senior Director IT at Inova Health System said: "[Other opinions] miss the concern of all Splunk customers. Has Cisco EVER been successful at delivering a software platform in the last 25 years? Especially one that isn't tied to a hardware sale? I can't think of one... Time will tell, but this will certainly cause a pause around purchasing strategy in this space."

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