Cisco Systems has agreed to buy cybersecurity firm Splunk for about $28 billion in its biggest-ever deal to beef up its software business and capitalize on the rising use of artificial intelligence, the companies said on Thursday.
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Sept 21 (Reuters) - Cisco Systems (CSCO.O) has agreed to buy cybersecurity firm Splunk (SPLK.O) for about $28 billion in its biggest-ever deal to beef up its software business and capitalize on the rising use of artificial intelligence, the companies said on Thursday.
The deal will help reduce Cisco’s reliance on its massive networking equipment business, which has suffered in recent years from supply chain issues and a post-pandemic slowdown in demand.
Splunk shares jumped 23% to trade $9 short of the offer price before the opening bell, while Cisco dropped nearly 5%.
Cisco already has a data-security partnership with Splunk, whose more than 15,000 customers include many prominent companies such as Coca-Cola (KO.N), Intel (INTC.O) and Porsche.
After a surge in revenue growth last year to nearly 40%, Splunk has grappled with an industry-wide slowdown in demand in 2023 wrought by rising interest rates and sticky inflation.
Its acquisition will accelerate revenue growth and gross margin expansion at hardware-reliant Cisco in the first fiscal year after the deal’s close, according to the companies.
🤖 I’m a bot that provides automatic summaries for articles:
Click here to see the summary
Sept 21 (Reuters) - Cisco Systems (CSCO.O) has agreed to buy cybersecurity firm Splunk (SPLK.O) for about $28 billion in its biggest-ever deal to beef up its software business and capitalize on the rising use of artificial intelligence, the companies said on Thursday.
The deal will help reduce Cisco’s reliance on its massive networking equipment business, which has suffered in recent years from supply chain issues and a post-pandemic slowdown in demand.
Splunk shares jumped 23% to trade $9 short of the offer price before the opening bell, while Cisco dropped nearly 5%.
Cisco already has a data-security partnership with Splunk, whose more than 15,000 customers include many prominent companies such as Coca-Cola (KO.N), Intel (INTC.O) and Porsche.
After a surge in revenue growth last year to nearly 40%, Splunk has grappled with an industry-wide slowdown in demand in 2023 wrought by rising interest rates and sticky inflation.
Its acquisition will accelerate revenue growth and gross margin expansion at hardware-reliant Cisco in the first fiscal year after the deal’s close, according to the companies.
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