The Google parent had more than $100 billion in cash on hand and short-term investments as of September 2018, according to YCharts. Big banks and activist investors snapped up shops, there were mega-mergers between one-time rivals, and subsidiaries spun off. Here are 12 other startups analysts say it could buy to fend off competitors. Customer Service. Craig is a proud Husky, having graduated from the University of Washington. 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. Read more . We would love to hear from you! The reported deal would be the . That compares with a $114 share price at the end of trading Friday and $127.45 after hours. Sign up for free newsletters and get more CNBC delivered to your inbox. See why organizations trust Splunk to help keep their digital systems secure and reliable. We've been tracking company news on mergers and acquisitions since 1999. Read focused primers on disruptive technology topics. According to Futurum Research, the deal would be. Chuck Robbins, CEO, Cisco Systems, speaking at the World Economic Forum, Davos, Switzerland, January 21, 2020. That certainly indicates the new cloud offerings are very successful with customers. See why organizations trust Splunk to help keep their digital systems secure and reliable. The Silicon Valley-based tech investor recently plopped $1 billion down on Splunk, a significant cash infusion given Splunk's current enterprise value sits at $23 billion. We use cookies to ensure you get the best experience on our website. Cisco has offered to buy business analytics provider Splunk, private equity-backed private security giant Allied Universal could be taken public in a $20 billion, three-way SPAC merger, and Apollo . A spoksperson for Splunk cited its policy not to comment on rumors or speculation. This allows me to: * Improve business processes and generate change successfully in organisations<br>* Manage . 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. 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. The offer exceeds Splunks current market capitalization by $2 billion, but reports indicate the two companies havent discussed it yet. 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. In fact, many large companies use multiple vendors for internal data analytics. A rumored Mandiant acquisition discussion may hint at Microsoft's 2022 kickoff to major cybersecurity firm buys. That would equate to a market cap of just over $25 billion. 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. To make the world smarter, happier, and richer. *Average returns of all recommendations since inception. Cisco Has Discussed Deal for Software Company Splunk, https://www.nytimes.com/2022/02/11/technology/cisco-splunk.html. People close to the company said the talks occurred recently, according to the Journal. 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. 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. But there's still lots of work to be done on the cloud business. 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. In June, the private-equity firm Silver Lake invested $1 billion in Splunk to help with that transition. You will be notified in advance of any changes in rate or terms. Palo Alto also bought security orchestration, automation and response player Demisto, a direct competitor of Phantom, in 2019 for $560 million. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Splunk said it does not comment on rumors or speculation. 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. San Jose, Calif.-based Cisco did not respond to CRNs request for comment on the alleged deal by publication time. Microsoft CEO Satya Nadella has been going on a major shopping spree. If you feel that youve landed on this page in error, please contact SDxCentral Support. 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. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. A 24/7 Wall St. analysis reveals that the largest merger deal of the past two decades was worth more than $128 billion. Pundits speculate that Google parent Alphabet could acquire ServiceNow, Atlassian, Splunk or perhaps Zayo.. 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. According to Futurum Research, the deal would be a good fitOpens a new window for both companies. San Jose, CA-headquartered Cisco Systems, Inc. has reportedly offered $20 billion-plus to acquire data analytics giant Splunk. Splunks stock was up 10.47 percent to $126.50 in after-hours trading Friday after the news was published. For many organizations, 2020 has been a year of cutting costs and staying afloat amid a turbulent market. Splunks acquisition of BugSense enhances our product offerings so that customers can analyze machine data directly from mobile devices and correlate it with other machine-generated data to gain Operational Intelligence. Cisco did not immediately respond to a request for comment. Founded in the era of data centers, it has struggled to fully transition to the cloud and adjust its pricing model. The Motley Fool has a disclosure policy. Silver Lake Chairman and Managing Partner Kenneth Hao will also join Splunk's board of directors to help guide the company's journey. 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. This Splunk shareholder hopes management holds out for a much higher price than was reported. 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. With dominant position in multiple on-premise markets, Ciscos valuation has been held back by more gradual moves toward the cloud and the revenue transition from opex vs. capex focused IT. The reported Cisco-Spunk deal could position the company as a much more formidable security player with competitor Palo Alto Networks. 2005 - 2023 Splunk Inc. All rights reserved. Anyone can read what you share. 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). Announcement Date: 6/6/2019. SEPTEMBER 2013. The companys software can be used for managing IT systems, DevOps and security. and is author of the Entrepreneur Journeys book series and Vision India 2020. The offer was made recently and the companies are not in active talks, the newspaper said, citing some of the sources. With the Acquisition Bode Well for Cisco? Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Founded in 2003, it was an early mover in the data analytics space, even before cloud computing came into being. 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. Cisco has sought to expand its security business while also selling data center networking equipment and Webex collaboration software. The Motley Fool owns shares of and recommends Datadog and Splunk. The company also made four cloud-related acquisitions in 2020. The ongoing business model transition and growing competition at Splunk could present additional challenges for Cisco if they pursued this acquisition. Splunk has positioned itself as the leader in helping large enterprises manage and monitor their IT systems. Cisco recently made an offer for IT management and data analytics company Splunk. You can manage your preferences at any time. Data is a real-time snapshot *Data is delayed at least 15 minutes. Got a confidential news tip? Discover what Splunk is doing to bridge the data divide. Will Townsend. Initial filing by director officer or owner of more than ten percent. Splunk jumped up 16 percent post-market on reports of the takeover bid. Cisco is known as a serial acquirer, effectively using acquisitions as a complement to research and development. However, Splunks investors reacted positively to the news, with the companys stock price jumping 9% on the morning of February 14. Founded in 2003, the software solutions provider has a market capitalisation of $18.2 billion, according to Refinitiv Eikon data. We want to hear from you. Technology has been a hotbed of mergers and acquisitions activity over the past year, as soaring stock prices have left companies flush with cash. 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. Just to provide a sense of the activity, Cisco conducted nine acquisitions in 2020, six in 2021, and has conducted one YTD in 2022. It has remained stable since at around $122 per share. Learn how we support change for customers and communities. 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. Prior to joining CRN, she covered the networking, unified communications and cloud space for TechTarget. These are used to let you login and to and ensure site security. With a price to sales ratio of 5.6. 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 have been . Douglas A. McIntyre. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. Opinion: Yes, Theres a Housing Crisis. Directly supervise a team of 15 global staff consisting of product, delivery . 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. So Splunk has been able to capture over 90 of the Fortune 100 companies as customers, even in spite of new cloud-based competition. The offer was made recently and the companies arent currently in active talks, some of the people said. Cost basis and return based on previous market day close. The offer exceeds Splunk's current market capitalization by $2 billion, but reports indicate the two companies haven't discussed it yet. 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. Two Days Mattered Most. 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. Pekka Lundmark, Nokia Brand Reveal, Mobile World Congress Barcelona 2023. Such a deal would be the largest ever for Cisco . 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). Alex Murdaugh Receives Life Sentence: What Happens Now? You will be charged The report about said discussions comes not long after Microsoft's mammoth $70 . 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 . My core competency is finding out people's issues in business. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. See why organizations around the world trust Splunk. She added that the acquisition of Splunk will help Cisco achieve growth in this segment. Company Location: Mount Laurel, NJ. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. The announcement marks a return to M&A activity for Splunk and the massive $1.05 billion deal for SignalFX in 2019. According to a follow-up report from Bloomberg, talks between the companies broke down in recent weeks. New transactions may be ongoing, let's look at the details. Splunk experts provide clear and actionable guidance. The industry leader for online information for tax, accounting and finance professionals. Plan your migration with helpful Splunk resources. 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. Every sell-side analyst on Wall Street has a higher price target than . And cloud-based annualized recurring revenue grew 75%, with a cloud-based net retention rate of 130%. However, a handful of major players, particularly in tech, have continued to expand through mergers and acquisitions. Making the world smarter, happier, and richer. The reported deal would be the largest price tag for Cisco, which is no stranger to technology acquisitions. Splunk's software has gained popularity as a tool for spotting security threats. 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. Heritage Business Systems. However, it appears Splunk has a fairly deep bench, especially with two big new hires from Amazon, so it should be able to find a suitable replacement either internally or externally. for both companies. Splunks acquisition of VictorOps adds collaborative incident management capabilities to Splunks portfolio and creates an analytics-driven Platform of Engagement for DevOps and IT customers to better prevent and resolve incidents. While the revenue has been growing consistently, it has not grown at especially remarkable rates. 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. 10 . This allows me to propose solutions that help my clients. Cisco Systems' rumored acquisition offer for Splunk would create one of the largest cybersecurity vendors in the world.. This is because of several transitions the company is undertaking at once. These two acquisitions formed the basis . Dropbox is a 9.3 billion market cap company. The deal, she said, will further strengthen Ciscos foothold in the security and analytics space, especially in Extended Detection and Response (XDR). Splunk has acquired in 4 different US states, and 3 countries. Our Standards: The Thomson Reuters Trust Principles. Read focused primers on disruptive technology topics. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. Splunk has been in the process of shifting toward providing cloud services to customers, and said in December that almost 37% of revenue in the latest quarter was tied to cloud usage. Network gear maker Cisco Systems Inc has made a takeover offer worth more than $20 billion for software maker Splunk Inc , the Wall Street Journal reported on Friday, citing people familiar with . 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. 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. Statement of changes in beneficial ownership of securities. 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. 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. Silver Lake obviously sees upside for Splunk stock and will collect a meager amount of interest along the way for its convertible debt stake in the company. All Rights Reserved. You may change your billing preferences at any time in the Customer Center or call 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. 4. Doug Merritt, Splunk's CEO for the past six years, stepped down in November. He is best known in the industry for his stint as the chief financial officer and later executive vice president at Salesforce. Is this the software value stock for you too? Company Location: U.K. Press Release: 1/30/2020 Xerox Acquires Arena Group, Expands Presence in European SMB Market. 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. 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? Doug Merritt, Splunk's CEO for the past six years, stepped down in November. So Splunk appears to have staying power, and is bound to benefit from the growth of the enterprise data analytics industry this decade. . 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 . Listen to article. 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. Access timely security research and guidance. Splunk's $1 billion cash windfall gets it access to some cheap capital -- at least cheap in the short-term. maroon and black color combination Addiction rehab & recovery treatment programs for seniors senior-recovery.org June 5. splunk acquisition rumors 2020 . It has remained stable since at around $122 per share. Splunk vs Uber I got the final offer from Splunk (P4: 230k, 15%, 440k/3yrs, TC=411k), probably the highest offer for P4. , which broke the news on February 11, the two companies havent gotten around to discussing the acquisition yet. 2020 - 20211 year. Splunk . 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. Build, own, manage and support B2B and B2C web and mobile properties. It will also affirm Ciscos projected dominance in the sector in the years ahead. a GAAP operating loss of $780 million in 2021. 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. 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. Alphabet certainly has the war chest for such deals. Learn More. Cisco Systems has held acquisition talks with Splunk, whose software mines data for insights, including security threats. 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. Splunk Application Performance Monitoring, EX-101.SCH - XBRL TAXONOMY EXTENSION SCHEMA. Splunk is currently unprofitable, and the stock has been unable to bounce back from last year's challenges with this interest rate cloud hanging over it. Management expects to be in the black for the balance of the year ahead, so that's good news. Initial filing by director officer or owner of more than ten percent. See here for a complete list of exchanges and delays. Splunks acquisition of Metafor expands our capabilities in IT operations and security incident and event management (SIEM) by adding machine learning and anomaly detection to our solutions, which helps customers detect unknown and malicious threats. Splunks acquisition of Plumbr enhances the auto-instrumentation, real user monitoring and deep application performance monitoring capabilities of Splunks Observability solutions. For every deal we do, we probably look at 10-15 companies. It appears Splunk is back in growth mode, and recent acquisitions and the launch of its new Observability Suite and Security Cloud offerings could help sustain this return to growth. 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. 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. According to Newman, Splunk underwent a rough phase in 2021, losing its CEO and witnessing its stock price taking a tumble, but the company still packs a punch and offers a lot of value to potential buyers. 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. 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. Splunks acquisition of Flowmill brings next-generation cloud network performance monitoring to Splunks Observability solutions. The biggest was IBM's $34 billion purchase of Red Hat in 2018, followed by Microsoft's $27 billion acquisition of LinkedIn in . 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. Splunk finished trading on Friday at roughly an $18 billion market cap, and after the after-hours surge, the market cap rose to $20.2 billion. VictorOps . for further big-ticket mergers and acquisitions in the cybersecurity sector in the year ahead, especially in the behavioral analytics space. So what should new GCP leader Thomas Kurian do? Microsoft's acquisition of B's parent company for $7.5 billion in March of this year shocked the gaming industry and raised the level of XBOX's camp. 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. Ciscos market capitalization is $227 billion. 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. 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). It's pretty likely Silver Lake didn't invest in Splunk to make 0.75%, but rather to make big money on the conversion. 3. Cost basis and return based on previous market day close. *Average returns of all recommendations since inception. 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 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. Then there's also the balance sheet. She, however, added a word of caution. Shares of Splunk have fallen 49% since reaching a record in September 2020. Splunk is a developer of software used to collect, index, search and analyze machine-generated data from websites, applications, sensors and devices. 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. Craig Galbraith is the editorial director for Channel Futures and Channel Partners, joining the team in 2008. Splunk . Is Responsible AI a Technology Issue or a Business Issue. 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.. According to a report by GlobalData, 24,689 deals were announced worldwide in H1 of 2020, which marks a 15% decline YoY. Splunk Redefines the Application Performance Monitoring Market. Additionally, cloud revenue has a lower gross margin than term software licenses, but that's generally made up for in higher growth. 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. Customer success starts with data success. 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. The board named Chairman Graham Smith as interim CEO and kicked off a search for a permanent replacement. Never Miss a Revenue Moment With Intent and Pre-Intent Data, 10 Actionable Data Trends in 2023 To Nail Your Analytics, How Technology Is Digitally Transforming Ad Operations, Three Ways Enterprise Architecture is Driving Digital Transformation, Seed-stage Companies Can Create FOMO to Gain an Edge in Fundraising, Correcting the Course of Failed Climate-conscious Planning with AI, Cloud Cost Optimization as a Lever Against Inflationary Pressure, How Simulations Can Help Us Solve the Climate Crisis in a Way That Benefits Everyone. I think Splunk is a very lucrative acquisition target for several major players including . It will also affirm Ciscos projected dominance in the sector in the years ahead. Rigor's monitoring and optimization solutions complement the other Splunk offerings. Cisco Has Discussed Deal for Software Company Splunk. His clients may own shares of the companies mentioned. Momentum Just Isn't Happening. Splunk's acquisition of TruSTAR extends its leadership in security analytics through cloud-native threat intelligence integration and automation. Now there are reports Microsoft is looking to buy Mandiant, the cybersecurity software firm formerly known as FireEye that is . 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. Its past deals include Acacia, a maker of optical network components; Luxtera, a semiconductor company; and ThousandEyes, a cloud intelligence company.