Cisco looks to expand its ‘AI-enabled security’ with $28 billion Splunk deal

Analytics and security software company Splunk is being acquired by networking-equipment giant Cisco for an estimated $28 billion in a deal announced Thursday.

It’s easily the biggest acquisition involving a cybersecurity-oriented company this year, and Cisco is paying $157 a share — a 31% premium to Splunk’s $119.59 closing price on Wednesday.

Splunk’s strength is helping organizations collect, search, organize and analyze data, including network activity.

Chuck Robbins, chair and CEO of Cisco, said the deal is part of the corporation’s drive to offer more “AI-enabled security and observability" to improve how it helps customers predict, prevent, detect and respond to cyberthreats.

Cisco already has a prominent and highly active cybersecurity research and threat intelligence arm, Talos, that it created about a decade ago.

“Splunk's security capabilities complement Cisco's existing portfolio, and together, will provide leading security analytics and coverage from devices to applications to clouds,” the companies said in a joint news release.

The largest deals for cybersecurity companies this year include French defense and aerospace corporation Thales’ acquisition of U.S.-based Imperva for $3.6 billion in July; private equity firm TPG’s $2.4 billion deal for the government services unit of cybersecurity company Forcepoint during that same month; and investment firm Vista Equity Partners’s acquisition of KnowBe4 for about $4.6 billion in February.

The Splunk deal continues a streak of cybersecurity acquisitions this year for Cisco, including cloud-oriented companies Lightspin and Valtix, as well as Armorblox, which specializes in artificial intelligence and machine learning software.

Cisco was close to making a bid for endpoint security company SenintelOne earlier this year but pulled out because of "problems with the company's revenue reporting," according to Israeli business news site Calcalist.