Cisco buying cybersecurity company Splunk for $28B

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Splunk and Cisco Unite To Accelerate Digital Resilience as One of the Leading Global Software Companies
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Cisco on Thursday announced an agreement to buy cybersecurity and observability company Splunk for about $28 billion.

The big picture: Legacy tech giants are usually the last to recognize they're being disrupted, but that doesn't seem to be the case with AI.

Expect a lot more of these sorts of mergers, even if the targets aren't AI-native. Details: The $157 per share offer represents over a 31% premium to Wednesday's closing price for Splunk shares.

The last time Splunk traded above $157 per share was in early 2021. It's the networking giant's largest acquisition. Cisco says the merger will add roughly $4 billion in ARR, boosting its subscription and recurring revenue efforts. The purchase price will be financed via a combination of cash and debt, with a final closing by the end of Q3 2024, the company said. What they're saying: "This will help our customers move from threat detection and response to threat prediction and prevention," said Cisco CEO Chuck Robbins during a conference call Thursday morning.

"In terms of observability, our complimentary capabilities will offer observability for the full IT stack, from the application to the network, across hybrid and multi-cloud environments." Editor's note: This story was updated with additional details about the deal.

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It was cheaper for Cisco to buy the company than a license, presumably

This so true. I've had some quotes for Splunk over the years and every one I get is so ridiculously expensive that it can't even be considered.

Somehow I don’t see the license fees for Splunk going down after this acquisition …