Cisco To Acquire Splunk, Stock Shoots Higher
Portfolio Pulse from Anusuya Lahiri
Cisco Systems, Inc has agreed to acquire Splunk Inc for $157 per share in cash, a total equity value of approximately $28 billion. This has led to a rally in Splunk's stock prices, while Cisco's stock prices fell. The acquisition is expected to be cash flow positive and gross margin accretive in the first fiscal year post-close and non-GAAP EPS accretive in year two. The transaction is expected to close by the end of the third quarter of 2024.

September 21, 2023 | 12:37 pm
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POSITIVE IMPACT
Splunk's stock prices rallied following the announcement of its acquisition by Cisco. The purchase price implies a premium of 31.3% on Splunk's September 20 closing of $119.59.
The acquisition announcement led to a rally in Splunk's stock prices. The purchase price implies a premium of 31.3% on Splunk's September 20 closing, which is beneficial for Splunk's shareholders.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Cisco's stock prices fell following the announcement of the acquisition of Splunk. The deal is expected to be cash flow positive and gross margin accretive in the first fiscal year post-close.
The acquisition announcement led to a drop in Cisco's stock prices. However, the deal is expected to be beneficial for Cisco in the long term, being cash flow positive and gross margin accretive in the first fiscal year post-close.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100