How much did Cisco pay to acquire Splunk?

Splunk common stockholders received $157.00 per share in cash, representing an aggregate equity value of approximately $28 billion. Shares held by dissenting stockholders who properly exercised appraisal rights under Delaware law were excluded from this consideration.

What happens to Splunk's employee equity awards?

Unvested options and RSUs were converted into cash awards equal to the merger consideration, payable on the original vesting schedule. Vested awards were cashed out at the merger consideration, less applicable tax withholdings. Performance-based RSUs converted at actual performance levels as determined by Splunk's board.

When does Cisco expect the Splunk acquisition to become accretive?

Cisco expects the transaction to be non-GAAP gross margin accretive in fiscal 2025 and non-GAAP EPS accretive in fiscal 2026. It also expects the deal to be cash flow positive, excluding certain acquisition-related and other items, in fiscal 2025.

Does this filing show the GAAP financial impact of the deal?

No. The filing does not include a purchase price allocation, pro forma financials, or GAAP impact figures. Cisco states that its non-GAAP projections cannot be reconciled to GAAP without unreasonable effort and that the GAAP impact may be potentially unpredictable and significant, so investors should review Cisco's subsequent periodic reports for those details.

Why is Cisco pursuing this acquisition?

Management positions the combination as a way to address AI-driven demand by pairing Cisco's networking infrastructure with Splunk's security and observability platforms and data platform capabilities. Cisco argues the combined portfolio will let customers consolidate point products, reduce costs, and gain comprehensive visibility across their digital environments.

CSCO 8-K: Acquisitions & Dispositions & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed March 18, 2024. Cited figures are marked; the original filing is the authoritative source.

On March 18, 2024, Cisco Systems (CSCO) completed its acquisition of Splunk Inc. through a merger in which Merger Sub merged into Splunk, leaving Splunk as a wholly owned subsidiary.

Splunk common stockholders received $157.00^a per share in cash, for an aggregate equity value of approximately $28 billion. Unvested and vested Splunk equity awards were converted into cash awards on the same or equivalent vesting terms, and Splunk's shares ceased trading on NASDAQ before the market opened that day. Cisco management frames the deal as strategically transformative, positioning the combined company as one of the largest software companies globally and combining Cisco's networking infrastructure with Splunk's security and observability platforms to address AI-driven demand for data, infrastructure, security, and monitoring.

The company expects the transaction to be cash flow positive (excluding certain acquisition-related items) and non-GAAP gross margin accretive in fiscal 2025, non-GAAP EPS accretive in fiscal 2026, and accretive to revenue growth and non-GAAP gross margin expansion over time. For investors, the key considerations are the scale of the cash outlay relative to Cisco's balance sheet, the integration risk of combining two large software and networking businesses, and whether the promised accretion and revenue acceleration materialize. The filing itself contains no GAAP financial impact, purchase price allocation, or pro forma figures, and the non-GAAP projections are explicitly unreconciled to GAAP, so investors should look to Cisco's subsequent periodic reports for those details.

02—Key points

Key Highlights

Completed acquisition of Splunk Inc. on March 18, 2024, with Splunk becoming a wholly owned subsidiary of Cisco.
Splunk stockholders received $157.00 per share in cash, implying an aggregate equity value of approximately $28 billion.
Unvested and vested Splunk options and RSUs were converted into cash awards with vesting schedules largely preserved, which carries future cash-compensation obligations.
Cisco expects the deal to be cash flow positive (excluding certain acquisition-related items) and non-GAAP gross margin accretive in fiscal 2025, and non-GAAP EPS accretive in fiscal 2026.
Management expects the acquisition to accelerate Cisco's revenue growth and non-GAAP gross margin expansion.
Splunk shares were delisted from NASDAQ, and the merger agreement dated September 20, 2023 was previously filed as Exhibit 2.1 to Cisco's September 21, 2023 8-K.
The non-GAAP financial projections are not reconciled to GAAP, and management cautions that the GAAP impact could be potentially unpredictable and significant.

03—Questions

Frequently Asked Questions

How much did Cisco pay to acquire Splunk?
Splunk common stockholders received $157.00 per share in cash, representing an aggregate equity value of approximately $28 billion. Shares held by dissenting stockholders who properly exercised appraisal rights under Delaware law were excluded from this consideration.
What happens to Splunk's employee equity awards?
Unvested options and RSUs were converted into cash awards equal to the merger consideration, payable on the original vesting schedule. Vested awards were cashed out at the merger consideration, less applicable tax withholdings. Performance-based RSUs converted at actual performance levels as determined by Splunk's board.
When does Cisco expect the Splunk acquisition to become accretive?
Cisco expects the transaction to be non-GAAP gross margin accretive in fiscal 2025 and non-GAAP EPS accretive in fiscal 2026. It also expects the deal to be cash flow positive, excluding certain acquisition-related and other items, in fiscal 2025.
Does this filing show the GAAP financial impact of the deal?
No. The filing does not include a purchase price allocation, pro forma financials, or GAAP impact figures. Cisco states that its non-GAAP projections cannot be reconciled to GAAP without unreasonable effort and that the GAAP impact may be potentially unpredictable and significant, so investors should review Cisco's subsequent periodic reports for those details.
Why is Cisco pursuing this acquisition?
Management positions the combination as a way to address AI-driven demand by pairing Cisco's networking infrastructure with Splunk's security and observability platforms and data platform capabilities. Cisco argues the combined portfolio will let customers consolidate point products, reduce costs, and gain comprehensive visibility across their digital environments.

04—Continue

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