Cisco Systems Inc. has been in discussions with software company Splunk for
the proposed acquisition. Meanwhile, Cisco is reportedly willing to pay more
than US $ 20 billion to acquire Splunk.
According to The New York Times, Splunk has a market capitalization of
around $18 billion, after its share price has fallen 30% since its chief
executive, Doug Merritt, unexpectedly stepped down in November. On the other
hand, Cisco's market capitalization has now reached US$ 227 billion.
Cisco did not immediately respond to a request for comment, while a Splunk
spokesman said the company does not comment on rumors or speculation.
For your information, Splunk is a company that mines data for insights,
including security threats, a business that is increasingly important as the
coronavirus pandemic is rapidly forcing many workers online.
Recently, the company has also been trying to move into the cloud business
and catch up with its competitors, such as Datadog, who started the cloud
business.
In June, private equity firm Silver Lake invested $1 billion in Splunk to
help with the transition.
Meanwhile, Cisco is known as an acquirer that effectively uses acquisitions
as a complement to research and development.
Cisco's previous successful deals include Acacia, a maker of optical
networking components; Luxtera, a semiconductor company; and ThousandEyes, a
cloud intelligence company.
Cisco Chief Executive Chuck Robbins told analysts in December that Cisco
would continue to seek acquisitions in the security area.
As is well known, technology has become a hotbed of merger and acquisition
activity over the past year, as soaring stock prices have flooded companies
with cash.
Meanwhile, Microsoft last month said it plans to acquire video game company
Activision Blizzard for nearly $70 billion, and Salesforce acquired
workplace software company Slack last year for $27.7 billion.