The stock fell 18% on Nov. 15, after the company said CEO Doug Merritt, who had been running the company for six years, would be stepping down immediately. 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, Copyright, Trademark and Patent Information. Splunks acquisition of Flowmill brings next-generation cloud network performance monitoring to Splunks Observability solutions. Alphabet certainly has the war chest for such deals. 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. According to a report by GlobalData, 24,689 deals were announced worldwide in H1 of 2020, which marks a 15% decline YoY. The offer was made recently and the companies arent currently in active talks, some of the people said. Chuck Robbins, CEO, Cisco Systems, speaking at the World Economic Forum, Davos, Switzerland, January 21, 2020. 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. 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. Douglas A. McIntyre. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Splunk's software collects, analyzes and visualizes real-time and historical machine data from any source. The offer was made recently and the companies are not in active talks, the newspaper said, citing some of the sources. We've been tracking company news on mergers and acquisitions since 1999. Invest better with The Motley Fool. We use cookies to ensure you get the best experience on our website. These two acquisitions formed the basis . Every sell-side analyst on Wall Street has a higher price target than . 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. Still, it does not have currently have a . 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. Opinion: Yes, Theres a Housing Crisis. Aug 22, 2019 . 2020 - 20211 year. Learn how we support change for customers and communities. So what should new GCP leader Thomas Kurian do? Splunk experts provide clear and actionable guidance. Network gear maker Cisco Systems has made a takeover offer worth more than $20 billion for software maker Splunk, The Wall Street Journal reported on Friday, citing people familiar with the matter. No, You Cant Build Here, Opinion: About Those Free Tickets to Hong Kong, Opinion: China Remains the Worlds Pandemic Risk. This Is the Largest Merger of the Past 20 Years. Here's how they differ, Bank of America loves this under-the-radar streaming stock out of China, sees 30% gain. That would equate to a market cap of just over $25 billion. The Company's most targeted sectors include internet software and services (50%) and software (29%).. Join Mergr and gain access to Splunk's M&A summary, the M&A summaries . . We are constantly evaluating potential opportunities. 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. Splunks stock was up 10.47 percent to $126.50 in after-hours trading Friday after the news was published. Initial filing by director officer or owner of more than ten percent. She added that the acquisition of Splunk will help Cisco achieve growth in this segment. Anyone can read what you share. Just to provide a sense of the activity, Cisco conducted nine acquisitions in 2020, six in 2021, and has conducted one YTD in 2022. Cisco recently made an offer for IT management and data analytics company Splunk. Splunk Inc. is an American software company based in San Francisco, California, that produces software for searching, monitoring, and analyzing machine-generated data via a Web-style interface. Ciscos growth is bogged down by a lack of foothold in the cloud-based subscription space which offers great promise for the future. 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. That certainly indicates the new cloud offerings are very successful with customers. The Wall Street Journal reported the potential deal earlier on Friday. This is because of several transitions the company is undertaking at once. Doug Merritt, Splunk's CEO for the past six years, stepped down in November. Report of unscheduled material events or corporate event, A statement of beneficial ownership of common stock by certain persons. 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 acquisition rumors 2020; joaquin niemann sponsors. Our servers do not recognize your request. His clients may own shares of the companies mentioned. Splunk jumped up 16 percent post-market on reports of the takeover bid. Accelerate value with our powerful partner ecosystem. The final billion-dollar deal (until we hear about Slack perhaps) is the $1.33 billion Vlocity acquisition earlier this year. Microsoft said last month that it was planning to acquire the video game company Activision Blizzard for nearly $70 billion, and Salesforce acquired the workplace software company Slack last year for $27.7 billion. Sep 12, 2021. 3. splunk acquisition rumors 2020lakeland correctional facility splunk acquisition rumors 2020. matthew 13:11 studylight; what game do bakers like to play. 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. 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. Silver Lake's investment is via convertible notes, debt that can be turned into new stock later on. At the time of the announced deal, that was some 30% above where Splunk stock was trading, although shares jumped nearly 10% higher on the news. The Motley Fool has a disclosure policy. Do you still have questions? Splunks acquisition of SignalSense enables Splunk to further innovate in our market-leading machine data platform and expands Splunks expertise in machine learning and cloud applications. Ciscos market capitalization is $227 billion. Splunk would be a perfect target for its ambitions, and would be Cisco's biggest acquisition ever, about triple (or more) the $7 billion acquisition of Scientific Atlanta back in 2005. Splunk makes acquisitions that are aligned with our business strategy and enable us to expand our product portfolio, address a broader set of customer challenges, and enhance our market leadership position as the platform for turning data into action. Billy Duberstein owns Amazon and Splunk. (1 minute) 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 . Splunk CEO on the data firm's new initiative focused on government cybersecurity, Jim Cramer's Investing Club meeting Friday: Costco, Eli Lilly, Apple, Goldman Sachs upgrades this internet of things stock which it sees surging 60%, Top 10 things the Club is watching in the stock market Friday. Sign In. Precept is a leading multimedia networking software company. Cisco, a leader in unified access security and multifactor authentication thanks to its 2018 $2.35 billion Duo Security buy, could be complimented by Splunks strength around security operations, which the company came by from its own 2018 acquisition of Phantom Cyber, a company specializing in security orchestration, automation and response capabilities. Splunk, like Cisco, has been shifting its business from selling on-premises software with traditional license pricing to cloud-based software sold on a subscription basis in a move that has been transformative for the company and its channel partners. $ + tax Splunks stock price fell 20% over a six-month period, and the company reportedOpens a new window a GAAP operating loss of $780 million in 2021. In GlobalDatas thematic scorecard for application software, Splunk ranked fifth out of 45 companies, and the company also boasts a score of 5 out of 5 in the cybersecurity theme. 2005 - 2023 Splunk Inc. All rights reserved. Dropbox is a 9.3 billion market cap company. San Jose, Calif.-based Cisco did not respond to CRNs request for comment on the alleged deal by publication time. Statement of changes in beneficial ownership of securities. Cisco and Splunk have been in the news since last week when The Wall . 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). Deliver the innovative and seamless experiences your customers expect. Splunks acquisition of Plumbr enhances the auto-instrumentation, real user monitoring and deep application performance monitoring capabilities of Splunks Observability solutions. 5. If it . San Jose, CA-headquartered Cisco Systems, Inc. has reportedly offered $20 billion-plus to acquire data analytics giant Splunk. Is Responsible AI a Technology Issue or a Business Issue. Cisco is reportedly eyeing a Splunk acquisition. Two Days Mattered Most. Big banks and activist investors snapped up shops, there were mega-mergers between one-time rivals, and subsidiaries spun off. In a note to investors, Morgan Stanley analyst Meta Marshall said the Splunk acquisition would help Cisco offer stiff competition to industry leaders in the cybersecurity space. There's also Cisco's original move into observability with its $3.7 billion AppDynamics purchase in 2017, and its $1 billion ThousandEyes buy in 2020. 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. The Motley Fool has a disclosure policy. Alex Murdaugh Receives Life Sentence: What Happens Now? Dropbox revenue for the twelve trailing months ending September 30, 2020 was $1.856B, a 16.63% increase year-over-year. 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. Give . Transform your business in the cloud with Splunk. San Jose, CA-headquartered Cisco Systems, Inc. has reportedly offered $20 billion-plus to acquire data analytics giant Splunk. 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. 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. Accelerate value with our powerful partner ecosystem. 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. Aruba, a Hewlett Packard Enterprise Company, AMD & Supermicro Performance Intensive Computing, Cisco Powers Hybrid Work With Private 5G, New Wi-Fi 6E And Catalyst Series. Watch: Retired Army Col. Paris Davis Awarded Medal of Honor, Why Barnes & Noble Is Copying Local Bookstores It Once Threatened, What Floridas Dying Oranges Tell Us About How Commodity Markets Work. 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. See why organizations around the world trust Splunk. How far over that figure will determine whether the acquisition goes through or not. A Division of NBCUniversal. Initial filing by director officer or owner of more than ten percent. Cisco Systems (NASDAQ: CSCO) offered to acquire Splunk (NASDAQ: SPLK) for more than $20 billion, the Wall Street Journal reported citing people familiar with the matter. 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. Discover what Splunk is doing to bridge the data divide. We are delighted that you'd like to resume your subscription. Splunk's software has gained popularity as a tool for spotting security threats. See why organizations trust Splunk to help keep their digital systems secure and reliable. Its past deals include Acacia, a maker of optical network components; Luxtera, a semiconductor company; and ThousandEyes, a cloud intelligence company. Splunk vs Uber I got the final offer from Splunk (P4: 230k, 15%, 440k/3yrs, TC=411k), probably the highest offer for P4. In spite of these strong qualities, Splunk traded at just 7.5 times trailing sales at the end of trading Friday -- a relative bargain in the high-growth software sector. 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. Robbins also cited the company's policy not to comment on rumors or speculation regarding the reported Splunk acquisition. Will the acquisition of Splunk change things? The positive reaction from investors has some logic to it. Build resilience to meet todays unpredictable business challenges. We want to hear from you. Pundits speculate that Google parent Alphabet could acquire ServiceNow, Atlassian, Splunk or perhaps Zayo.. The Motley Fool owns and recommends Amazon, Cisco Systems, Datadog, and Splunk. 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. Cisco Systems, Inc. signed a definitive agreement to acquire privately-held Precept Software, Inc. of Palo Alto, California. It has remained stable since at around $122 per share. TechCrunch. Graham V. Smith, the chairman of Splunks board, is currently serving as interim CEO to fill the leadership void. acquisition-related adjustments, amortization of intangible assets and . Company Location: U.K. Press Release: 1/30/2020 Xerox Acquires Arena Group, Expands Presence in European SMB Market. Cisco CEO Chuck Robbins. (if applicable) for The Wall Street Journal. While the offer from Cisco is a nice indicator of Splunk's value, as a Splunk shareholder, I really hope management rejects the offer or demands a much higher price. To make the world smarter, happier, and richer. The offer was . a 17% rise in net income and a 6% rise in revenue in Q2 2022 against Q2 2021. In the most recent quarter, revenue growth came in at 19%, but ARR grew 37%. The notes have an annual interest rate of just 0.75% per year payable to Silver Lake, and they mature in July 2026 if they haven't been repurchased or redeemed by then. and is author of the Entrepreneur Journeys book series and Vision India 2020. 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. In June, the private-equity firm Silver Lake invested $1 billion in Splunk to help with that transition. Build resilience to meet todays unpredictable business challenges. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. With a price to sales ratio of 5.6. 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. 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. maroon and black color combination Addiction rehab & recovery treatment programs for seniors senior-recovery.org Customer success starts with data success. We continue to see incredibly strong demand across our portfolio, emphasizing the criticality and relevance of Ciscos innovation. The initial conversion price is $160 per share. Cisco is using acquisitions to help it grow . Splunk Application Performance Monitoring. Cisco is known as a serial acquirer, effectively using acquisitions as a complement to research and development. For every deal we do, we probably look at 10-15 companies. 10 . List of Splunk 's 16 Acquisitions, including TwinWave and TruSTAR. 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. The potential deal could position Cisco to compete with security leader Palo Alto Networks in the security operations space. 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. It's obviously a nice thing when someone is interested in your stock, but as a recent Splunk shareholder, I'm hoping the company doesn't sell, if the offer is in fact close to $20 billion. Here are 12 other startups analysts say it could buy to fend off competitors. If the deal goes through, Cisco is expected to gain a dominant position in the enterprise security market, she said. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. 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. 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. You do not have access to www.sdxcentral.com. Several years ago, Splunk began to deploy its offering via the cloud on a subscription basis. Statement of changes in beneficial ownership of securities. 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. for further big-ticket mergers and acquisitions in the cybersecurity sector in the year ahead, especially in the behavioral analytics space. As a reminder, debt converted into new stock dilutes ownership for existing shareholders. So, headline revenue numbers may be misleading, giving the impression Splunk is lagging behind cloud-native upstarts such as Dynatraceand Datadog. Apr 16, 2021 1:02 PM EDT. Craig Galbraith is the editorial director for Channel Futures and Channel Partners, joining the team in 2008. 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 . Read the Wall Street Journal report here. Without these cookies, our Services won't work properly or won't be able to provide many features and functionality. Additionally, cloud revenue has a lower gross margin than term software licenses, but that's generally made up for in higher growth. 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? Splunk Redefines the Application Performance Monitoring Market. Palo Alto also bought security orchestration, automation and response player Demisto, a direct competitor of Phantom, in 2019 for $560 million. Our robust order strength, record backlog and double-digit growth in annual recurring revenue position us well to deliver growth, said Chuck Robbins, chair and CEO of Cisco. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Customer Service. Concurrent with Silver Lake's investment, Splunk said it will also begin executing a new $1 billion share repurchase plan (which should help offset any future conversion of the debt into new stock . The industry leader for online information for tax, accounting and finance professionals. The companys software can be used for managing IT systems, DevOps and security. Cisco has sought to expand its security business while also selling data center networking equipment and Webex collaboration software. L Brands' plan was to spin its Bath & Body Works brand off into a stand-alone company and sell its lagging Victoria's Secret/Pink brands to the highest bidder. Youre reading a free article with opinions that may differ from The Motley Fools Premium Investing Services. Investment advisory firm The Motley Fool said the acquisition would make a lot of strategic sense for Cisco, which has aimed to move beyond its historical emphasis on hardware to incorporate more software and services offerings.. Now there are reports Microsoft is looking to buy Mandiant, the cybersecurity software firm formerly known as FireEye that is . *Average returns of all recommendations since inception. It's pretty likely Silver Lake didn't invest in Splunk to make 0.75%, but rather to make big money on the conversion. View our Privacy Policy for more information. Not surprisingly, when asked about the rumored acquisition during the earnings call, Robbins was coy, refusing to comment on the rumors and providing no hints in either his comments or . See here for a complete list of exchanges and delays. SEPTEMBER 2013. Splunks acquisition of SignalFx adds real-time monitoring and metrics for cloud infrastructure, microservices and applications, enhancing Splunks position as a leader in observability and APM. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. While Meraki, Sourcefire, OpenDNS, Acacia have been well-executed acquisitions, AppDynamics has stood out as a pure-play software acquisition that has not performed well (with AppDynamics revenue down Y/Y in some recent quarters). New transactions may be ongoing, let's look at the details. It has remained stable since at around $122 per share. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. According to a follow-up report from Bloomberg, talks between the companies broke down in recent weeks. See why organizations around the world trust Splunk. Doug Merritt, Splunk's CEO for the past six years, stepped down in November. 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. 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. Save Search . VictorOps acquired by Splunk . Sign up for free newsletters and get more CNBC delivered to your inbox. This one was a gift for the core CRM product. But there's still lots of work to be done on the cloud business. Splunks acquisition of Streamlio accelerates Splunk's efforts in real-time stream processing and containerized multi-tenant cloud platform applications expanding Splunk's commitment to and participation in the open source software community. Splunk has positioned itself as the leader in helping large enterprises manage and monitor their IT 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. Over half of Rigor's customers are already Splunk customers, so when they came calling as a potential acquirer, it was a perfect fit.