8-KMaterial AgreementsRegulation FDOther Events+1

CISCO SYSTEMS, INC. 8-K Report, Material Agreement (Sep 21, 2023)

Filed September 21, 2023For Securities:CSCO

Summary

Cisco Systems, Inc. has announced a significant strategic move with the entry into a definitive agreement to acquire Splunk Inc. for approximately $28 billion. This all-cash transaction will see Splunk become a wholly-owned subsidiary of Cisco. The acquisition aims to enhance Cisco's capabilities and offer a more comprehensive platform to its customers, particularly in areas of digital resilience. The deal has been unanimously approved by Cisco's Board of Directors and is expected to close by the end of the third quarter of calendar year 2024, subject to customary closing conditions including regulatory and stockholder approvals. The transaction involves a cash payment of $157.00 per share for Splunk's outstanding common stock. Cisco will also assume Splunk's outstanding equity awards, with vested options and RSUs being converted into cash payments, while unvested awards will be converted into contingent cash payments that will vest over time based on their original schedules. This acquisition represents a substantial investment by Cisco and signals a significant shift in its strategy to bolster its software and data analytics offerings.

Key Highlights

  • 1Cisco to acquire Splunk Inc. in an all-cash transaction valued at approximately $28 billion.
  • 2Each share of Splunk common stock will be converted into $157.00 in cash.
  • 3The acquisition is expected to enhance Cisco's platform capabilities and digital resilience offerings.
  • 4The deal has received unanimous approval from Cisco's Board of Directors.
  • 5Closing is anticipated by the end of the third quarter of calendar year 2024, subject to regulatory and shareholder approvals.
  • 6A Voting and Support Agreement has been entered into with Hellman & Friedman Advisors LLC, representing approximately 7.6% of Splunk's outstanding stock, agreeing to vote in favor of the merger.
  • 7Termination fees are stipulated, with Cisco potentially paying $1.478 billion and Splunk potentially paying $1 billion under specific circumstances.

Frequently Asked Questions

Cisco is acquiring Splunk for an aggregate equity value of approximately $28 billion. Each share of Splunk common stock outstanding will be converted into the right to receive $157.00 in cash.

The merger is subject to several conditions, including the adoption of the Merger Agreement by a majority of Splunk's outstanding stockholders, the expiration or termination of waiting periods under antitrust laws (like the Hart-Scott-Rodino Act) and approval under other applicable regimes, the absence of any prohibiting orders or laws, the accuracy of representations and warranties, material compliance with obligations, and the absence of a Company Material Adverse Effect on Splunk. The parties anticipate closing by the end of Q3 2024.

Vested Splunk stock options will be cancelled and converted into a cash payment equal to the excess of the merger consideration ($157.00) over the exercise price. Unvested stock options will be converted into a contingent right to receive a cash payment that will vest and become payable according to the original vesting schedule. Similarly, vested Splunk RSUs will be cancelled and converted into a cash payment, while unvested RSUs will be converted into a contingent cash payment that will vest over time, subject to the same terms and conditions.

Cisco entered into a Voting and Support Agreement with certain funds affiliated with Hellman & Friedman Advisors LLC (H&F). H&F, which owns approximately 7.6% of Splunk's outstanding common stock, has agreed to vote its shares in favor of the merger and against any competing transactions. This agreement helps secure a significant portion of the necessary stockholder approval for the transaction.