We are constantly evaluating potential opportunities. 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. 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. Report of unscheduled material events or corporate event, A statement of beneficial ownership of common stock by certain persons. 10 . We've been tracking company news on mergers and acquisitions since 1999. Here's how they differ, Bank of America loves this under-the-radar streaming stock out of China, sees 30% gain. The ongoing business model transition and growing competition at Splunk could present additional challenges for Cisco if they pursued this acquisition. Pekka Lundmark, Nokia Brand Reveal, Mobile World Congress Barcelona 2023. The Motley Fool has a disclosure policy. Cisco Systems made a takeover offer worth more than US$20 billion (A$28 billion) for software maker Splunk, the Wall Street Journal reported, citing people familiar with the matter. This allows me to: * Improve business processes and generate change successfully in organisations<br>* Manage . This cloud transformation also caused Splunk to dip into negative free cash flow territory, and it only just returned to positive free cash flow in Q1 2022 (to $66.7 million). 5. First of all, Splunk is far off from its all-time highs, down about 48% from its 2020 highs at the end of trading on Friday. Splunk's software collects data logs and can give an enterprise added insight into operations, security, and application performance. Ciscos $20 billion acquisition offer, which is $13 billion more than its highest acquisition ever, comes after the company announcedOpens a new window a 17% rise in net income and a 6% rise in revenue in Q2 2022 against Q2 2021. The combination could create a security powerhouse that would combine Ciscos strength in network security with San Francisco-based Splunks strength in data-focused security operations. 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. In that light, it's no wonder Cisco may see an opportunity to swoop in at this time of transition and uncertainty to take Splunk for itself. Transform your business in the cloud with Splunk. You can manage your preferences at any time. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. eric kocher generation kill; blue shield of northeastern ny claims address; alycia debnam carey siblings; cauliflower jalapeno nobu; San Jose, Calif.-based Cisco did not respond to CRNs request for comment on the alleged deal by publication time. The positive reaction from investors has some logic to it. The data log management and monitoring software leader has also trailed behind its smaller higher-growth and cloud-native peers as it adapts its business to more modern customer needs. The purchase marks one of the largest ever for the software industry. Invest better with The Motley Fool. In 2020, asset management went on a shopping spree. Anyone can read what you share. 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. Access timely security research and guidance. Splunks acquisition of Phantom Cyber adds security orchestration, automation and response to Splunks portfolio and extends automation capabilities to Splunk's customers in security and IT. Silver Lake Chairman and Managing Partner Kenneth Hao will also join Splunk's board of directors to help guide the company's journey. 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. Cloudmeter. Splunk's software collects, analyzes and visualizes real-time and historical machine data from any source. No deal is currently on the table, according to two people familiar with the talks, but Cisco could pay more than $20 billion, one said. The two companies have an existing partnership in which Cisco uses Splunks analytics surface insights and inject more automation across its security, networking, wireless, data center and collaboration portfolios. Sign In. Splunks acquisition of Drastin expands Splunks search-driven analytics capabilities and enhances our ability to provide an intuitive search experience for our customers. Learn More. Craig Galbraith is the editorial director for Channel Futures and Channel Partners, joining the team in 2008. With a price to sales ratio of 5.6. A 24/7 Wall St. analysis reveals that the largest merger deal of the past two decades was worth more than $128 billion. 3rd Party Cookie de-Personalization - We configure 3rd party analytics cookies to anonymize IP address and 3rd party targeting cookies to only set non-personalized information in these cookies to respect your privacy. 2005 - 2023 Splunk Inc. All rights reserved. Discover what Splunk is doing to bridge the data divide. Just to provide a sense of the activity, Cisco conducted nine acquisitions in 2020, six in 2021, and has conducted one YTD in 2022. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Company Location: U.K. Press Release: 1/30/2020 Xerox Acquires Arena Group, Expands Presence in European SMB Market. Company Location: Mount Laurel, NJ. Daily chart of Splunk stock. Robbins also cited the company's policy not to comment on rumors or speculation regarding the reported Splunk acquisition. VictorOps acquired by Splunk . The Google parent had more than $100 billion in cash on hand and short-term investments as of September 2018, according to YCharts. Customer Service. Statement of changes in beneficial ownership of securities. Announcement Date: 6/6/2019. You will be notified in advance of any changes in rate or terms. Splunk The $19.67 billion data-analytics company Splunk has had its ups and downs. So Splunk has been able to capture over 90 of the Fortune 100 companies as customers, even in spite of new cloud-based competition. Making the world smarter, happier, and richer. In June, the private-equity firm Silver Lake invested $1 billion in Splunk to help with that transition. Precept is a leading multimedia networking software company. The Leading Resource on Next-Generation IT Infrastructure. SEPTEMBER 2013. The companys software can be used for managing IT systems, DevOps and security. Splunks acquisition of Caspida adds Behavioral Analytics to Splunks security portfolio and expands our ability to address a broader set of security challenges faced by customers including advanced threats, insider threats and fraud. SAN FRANCISCO Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in . You will be charged The offer was . 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. Alphabet certainly has the war chest for such deals. Cisco Systems has put down a takeover offer for Splunk worth more than $20 billion, according to a Friday evening report published by The Wall Street Journal. Cisco Systems has held acquisition talks with Splunk, whose software mines data for insights, including security threats. The notes only bear an interest rate of 0.75%, but convert to equity at $160 per share. Listen to article. Alex Murdaughs Trial Lasted Six Weeks. Splunk Application Performance Monitoring. Technology has been a hotbed of mergers and acquisitions activity over the past year, as soaring stock prices have left companies flush with cash. According to The Wall Street Journal, Cisco (Nasdaq: CSCO) has made a "takeover offer" of more than $20 billion for Splunk, a software maker. 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. See why organizations around the world trust Splunk. According to a follow-up report from Bloomberg, talks between the companies broke down in recent weeks. Management expects to be in the black for the balance of the year ahead, so that's good news. Statement of changes in beneficial ownership of securities. In November last year, San Francisco-based Splunk announced Doug Merritt has stepped down as its chief executive officer (CEO) and that the company's chair, Graham Smith, would be the interim CEO. At the peak of its after-hours move, Splunk was valued at more than $20 billion, up from $18.2 billion at the close of trading. Splunks acquisition of KryptonCloud expands Splunks ability to innovate for IoT use cases with our market-leading machine data platform. Cisco did not immediately respond to a request for comment. According to Futurum Research, the deal would be. a GAAP operating loss of $780 million in 2021. As a shareholder, I'm certainly hoping Splunk holds out for a higher price. The Omnition purchase follows Splunk's announcement last month that it planned to acquire cloud monitoring company SingalFx for $1.05 billion -- its largest acquisition ever. Customer Service. A statement of beneficial ownership of common stock by certain persons. The stock's still trading below its 50-, 100-, and 200-day moving averages after a Christmas period in which you'd have expected the stock to rebound amid a 2.8% . Cisco Has Discussed Deal for Software Company Splunk. Across 2020, Splunk's cloud business represented nearly half of the company's software bookings, enabling organizations to migrate workloads and applications to the cloud, manage colossal spikes in data volume or increase visibility into cloud security risks. That's a change from its traditional business model of selling perpetual software licenses, deployed in customers' data centers. The people requested anonymity because the information is confidential. Already a member? Though it's been beat down in the last year, Splunk operates as the leader in a growing industry and could be a real long-term value for those who can patiently wait out the inevitable bumps in the road. Our servers do not recognize your request. Buy These 2 Stocks in 2023 and Hold for the Next Decade, Warren Buffett's Latest $2.9 Billion Buy Brings His Total Investment in This Stock to $66 Billion in 4 Years, Joe Biden Has Advocated Cutting Social Security Benefits 3 Times, Join Over Half a Million Premium Members And Get More In-Depth Stock Guidance and Research, Motley Fool Issues Rare All In Buy Alert, Copyright, Trademark and Patent Information. Data is a real-time snapshot *Data is delayed at least 15 minutes. Alex Murdaugh Receives Life Sentence: What Happens Now? Read focused primers on disruptive technology topics. Finally, Splunk attracted tech-focused private equity firm Silver Lake last summer, which invested $1 billion in Splunk in the form of convertible preferred stock in June 2021. The company also made four cloud-related acquisitions in 2020. Splunk (SPLK) Q4 2023 Earnings Call Transcript, The Nasdaq Could Soar in 2023 -- 5 Stocks Down 57% to 91% to Buy Before It Does, Why Splunk Shares Gained 10.8% Last Month, 1 Monster Growth Stock to Buy Hand Over Fist, According to Wall Street, 2 Reasons to Avoid a Roth 401(k) for Your Retirement Savings, Want $1 Million in Retirement? Get this delivered to your inbox, and more info about our products and services. It has more recently sought to shift toward cloud computing and catch up with its competitors, like Datadog, that started their business in the cloud. Silver Lake's investment is via convertible notes, debt that can be turned into new stock later on. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. 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. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. 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. Splunk shares rose as much as 14% in extended trading on Friday after the Wall Street Journal reported that Cisco made an offer to buy the data analytics software company for over $20 billion. Other tech companies have made that transition in the past, but when they do undertake this transition, they will initially show revenue declines, as larger multi-year deals are replaced by smaller annual but recurring revenue. While the revenue has been growing consistently, it has not grown at especially remarkable rates. This is because of several transitions the company is undertaking at once. Splunks stock was up 10.47 percent to $126.50 in after-hours trading Friday after the news was published. 2020 - 20211 year. *Average returns of all recommendations since inception. Billy Duberstein owns Amazon and Splunk. 2005 - 2023 Splunk Inc. All rights reserved. It's pretty likely Silver Lake didn't invest in Splunk to make 0.75%, but rather to make big money on the conversion. However my wife wants me to stay at Uber (5a, 450k, 5 yoe) since she sees the high TC and rising stock price soon after COVID . Big banks and activist investors snapped up shops, there were mega-mergers between one-time rivals, and subsidiaries spun off. 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. Companies Contacts Investors Funding Rounds Acquisitions People Events Schools Hubs Saved . So what should new GCP leader Thomas Kurian do? The analyst believes Cloudera shareholders are getting a good deal with the private equity buyout."We note CLDR has been the target of acquisition rumors since mid-2020, and thus we view the . Feb 11 (Reuters) - Network gear maker Cisco Systems Inc (CSCO.O) has made a takeover offer worth more than $20 billion for software maker Splunk Inc (SPLK.O), the Wall Street Journal reported on Friday, citing people familiar with the matter. She, however, added a word of caution. Last week, Rigor's acquisition by Splunk was announced and it's a testament to Craig and his team for building an . for both companies. Founded in 2003, the software solutions provider has a market capitalisation of $18.2 billion, according to Refinitiv Eikon data. Its past deals include Acacia, a maker of optical network components; Luxtera, a semiconductor company; and ThousandEyes, a cloud intelligence company. Splunks acquisition of Plumbr enhances the auto-instrumentation, real user monitoring and deep application performance monitoring capabilities of Splunks Observability solutions. Deliver the innovative and seamless experiences your customers expect. 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. We continue to see incredibly strong demand across our portfolio, emphasizing the criticality and relevance of Ciscos innovation. Splunk Acquisition Rumors. Plan your migration with helpful Splunk resources. 4. Is this the software value stock for you too? 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. 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. For every deal we do, we probably look at 10-15 companies. Frisco, Texas, United States. June 5. splunk acquisition rumors 2020 . 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. Gina Narcisi is a senior editor covering the networking and telecom markets for CRN.com. San Jose, CA-headquartered Cisco Systems, Inc. has reportedly offered $20 billion-plus to acquire data analytics giant Splunk. The reported deal would be the . Aug 22, 2019 . Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. Total revenue in Q1 2022 was up just 16% from a year ago to $502 million, a decent rally after overall revenue fell 5% last year. $ + tax The company has been pivoting to a recurring revenue model by shifting from traditional software licenses to cloud-based subscriptions while also steadily growing the customer base. . So Splunk appears to have staying power, and is bound to benefit from the growth of the enterprise data analytics industry this decade. The report cited people familiar with the matter and did not say where the potential deal stands. It has remained stable since at around $122 per share. Initial filing by director officer or owner of more than ten percent. Sign up to Stock Advisor for $79 for 1 year, Save 15% on orders of $100+ with Kohl's coupon, How Chilis Is Prepping for Tough Times, Starting With the Fries, Electric Vehicles Are Shattering the Barrier to Adoption that Could Matter Most, The Surprising Ways Walking Delivers a High-Intensity Workout, The Tax Play That Saves Some Couples Big Bucks. Splunk . Splunk, for its part, plans to use the cash to continue to transform its business for the cloud era. 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.. You can see Splunk's revenue took a dip in 2020 as it went through the trough of this transition. When submitting your ticket, please include the RayID detailed below for a faster resolution. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Cisco recently made an offer for IT management and data analytics company Splunk. Before that, he spent more than 11 years as an anchor, reporter and managing editor in television newsrooms in North Dakota and Washington state. However, an ability to package Splunks leading Security analytics and ITOM solutions with other security offerings, further optimize distribution and pricing, could present very interesting potential M&A synergies for Cisco, Marshall added. New transactions may be ongoing, let's look at the details. And over the past few years, Splunk has made a number of tuck-in acquisitions to enter into the hot observability space, which allows corporations to monitor the health of software applications, in addition to IT infrastructure. Cisco is using acquisitions to help it grow . Every sell-side analyst on Wall Street has a higher price target than Friday's close, with the lowest at $120 per share, and the highest at $225 per share, with the average at $162. Splunk's $1 billion cash windfall gets it access to some cheap capital -- at least cheap in the short-term. It's not that I am clearvoyant, it is just my nature to keep asking questions, truly listen to the answers and connect the dots until I have a clear understanding. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Opinion: Yes, Theres a Housing Crisis. That certainly indicates the new cloud offerings are very successful with customers. Momentum Just Isn't Happening. 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. Will Townsend. His clients may own shares of the companies mentioned. She added that the acquisition of Splunk will help Cisco achieve growth in this segment. Statement of changes in beneficial ownership of securities. Prior to joining CRN, she covered the networking, unified communications and cloud space for TechTarget. 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. 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 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. As for Cisco, Newman said the company made significant investments in cloud, software, and other higher-margin offerings, and the Splunk deal could help it achieve further growth in these bitterly-contested verticals. Apr 16, 2021 1:02 PM EDT. Read focused primers on disruptive technology topics. Its software helps capture, index and correlate real-time data in a searchable repository, from which it can generate graphs, reports, alerts, dashboards and visualizations. Learn how we support change for customers and communities. At this price, it appears Cisco would be getting a steal, unless the price winds up being a lot higher than the $20 billion reported. If you feel that youve landed on this page in error, please contact SDxCentral Support. Splunk (SPLK -1.40%) has been a severe underperformer in the last year. See why organizations trust Splunk to help keep their digital systems secure and reliable. Cisco Systems' rumored acquisition offer for Splunk would create one of the largest cybersecurity vendors in the world.. Give . 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. 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. Build resilience to meet todays unpredictable business challenges. That compares with a $114 share price at the end of trading Friday and $127.45 after hours. The Wall Street Journal reported the potential deal earlier on Friday. 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. At just under 10 times trailing-12-month sales, this cloud stock trades for a discount to its higher growth peers like Dynatrace and Datadog. We would love to hear from you! Splunk's software has gained popularity as a tool for spotting security threats. 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. [Related: Cisco Powers Hybrid Work With Private 5G, New Wi-Fi 6E And Catalyst Series]. SignalFx . Splunks stock price fell 20% over a six-month period, and the company. Splunk vs Uber I got the final offer from Splunk (P4: 230k, 15%, 440k/3yrs, TC=411k), probably the highest offer for P4. See why organizations trust Splunk to help keep their digital systems secure and reliable. a 17% rise in net income and a 6% rise in revenue in Q2 2022 against Q2 2021. Heritage Business Systems. 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. Ciscos planned acquisition of Splunk has received favorable reactions from industry analysts. The reported Cisco-Spunk deal could position the company as a much more formidable security player with competitor Palo Alto Networks. Splunk has acquired in 4 different US states, and 3 countries. They said I didn't meet their bar for principal but P4-high. Cisco is reportedly eyeing a Splunk acquisition. 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. In the most recent quarter, revenue growth came in at 19%, but ARR grew 37%.