Key Points
NEW YORK, Sept 26 (Reuters) - Cisco Systems' (CSCO.O) $28 billion deal for Splunk (SPLK.O) is likely to prompt other technology giants to splash out on similar acquisitions of software vendors with predictable subscription revenue, investment bankers and analysts say...
Splunk, a cybersecurity and data analytics firm, was in the process of shifting its business model from licensing its software to charging for subscriptions when it announced an agreement last week to sell itself to Cisco, making it the third-largest software acquisition of all time...
Cisco CEO Chuck Robbins, who has been expanding his company's services offerings to compensate for its moribund telecommunications equipment business, told analysts that the $4 billion in annual recurring revenue that Splunk would bring from its subscriptions was a key driver behind the deal...
The improving outlook for software mergers and acquisitions is a welcome boost for dealmakers, which have seen activity in the technology sector drop 61% year-to-date in the first 8 months of 2023 to $231.5 billion, according to LSEG data...
New Relic (NEWR.N), a Splunk competitor, agreed in July to be sold to private equity firms Francisco Partners and TPG Inc (TPG.O) for $6.5 billion.. David Chen, co-head of global technology investment banking at Morgan Stanley (MS.N), predicts that a rally in the Nasdaq 100 index this year and market fears of an economic recession receding will embolden technology companies to follow Cisco's example and spend on big acquisitions...
