Cybersecurity company Splunk (NASDAQ: SPLK) jumped on Thursday after it was announced that it will be acquired by Cisco (CSCO) for $157 per share in cash, indicating a total equity value of around $28 billion. The acquisition is expected to close by the third quarter of next year and is likely to be cash flow positive and gross margin accretive in the first fiscal year after the close of the acquisition. The transaction is anticipated to be accretive to the combined company’s adjusted EPS in year two.
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Gary Steele, President and CEO of Splunk, commented, “Uniting with Cisco represents the next phase of Splunk’s growth journey, accelerating our mission to help organizations worldwide become more resilient, while delivering immediate and compelling value to our shareholders. Together, we will form a global security and observability leader that harnesses the power of data and AI to deliver excellent customer outcomes and transform the industry.”
After the close of the acquisition, Splunk’s current President and CEO, Gary Steele, will join Cisco’s Executive Leadership Team and report to CEO Chuck Robbins.
What is the Forecast for Splunk Stock?
SPLK stock has shown a strong performance this year, surging by more than 35%. Overall, Wall Street analysts are cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 17 Buys and nine Holds.
However, these analyst ratings may change now following the news of this acquisition.