Wedbush analysts told investors in a note Thursday that the news this morning that Cisco Systems (NASDAQ:CSCO) will acquire Splunk (NASDAQ:SPLK) in a massive $28 billion deal "will send a ripple impact across the software/cyber security universe."
Cisco intends to acquire Splunk for $157 per share in cash. Once closed, the deal will see Splunk President and CEO Gary Steele join Cisco's Executive Leadership Team, reporting to Chair and CEO Chuck Robbins.
"At $157 per share in an all-cash offer this is a ~30% premium to Splunk's closing price and a valuation representing roughly 6x FY25 revs," explained analysts. "We view this as a fair multiple for this strategic asset with now investors laser-focused on who is next."
They added that it is the "right move at the right time for Cisco" as well as a "well-designed strategic poker move that caught the Street off guard to get a great unique software asset at a fair multiple."
Elsewhere, TD Cowen analysts said there are positive implications for cybersecurity.
"This announcement carries positive implications for CRWD given its plans for next-gen SIEM," said analysts. "We also see positive implications for TENB in Vulnerability Management and potentially mildly negative implications for S as S's share price may reflect acquisition speculation by CSCO."