5 Software Firms Ripe for M&A Plays After $28B Splunk Deal

Cisco’s planned purchase of observability software firm Splunk could be a harbinger of more Big Tech software plays, observers say.

Shane Snider , Senior Writer, InformationWeek

September 28, 2023

5 Slides

Networking giant Cisco’s massive $28 billion bid to buy software firm Splunk could spark a mergers and acquisitions feeding frenzy for other Big Tech players, analysts and investors say.

With tech companies still licking their wounds after a tough post-pandemic period saw profits and revenues nosedive, adding software companies with growth potential may seem like a safe bet. Add to that the fact that some software companies may be undervalued as stock prices have dropped, and there are plenty of bargains to be had in a promising software market, analysts say.

Wedbush analyst Dan Ives called Cisco’s Splunk purchase a “well-designed strategic poker move that caught the Street off guard to get a great unique software asset at a fair multiple.” Cisco’s bid of $157 per share is roughly six times Splunk’s projected 12-month revenue, according to financial filings.

Ives thinks Cisco’s “shot across the bow” will prompt other tech giants like Microsoft, Google, Oracle, Amazon, Adobe, and IBM to consider their own deals to eat up software and cybersecurity companies.

InformationWeek takes a look at five software firms that could be attractive for the next Big Tech play:

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Mergers & Acquisitions

About the Author(s)

Shane Snider

Senior Writer, InformationWeek, InformationWeek

Shane Snider is a veteran journalist with more than 20 years of industry experience. He started his career as a general assignment reporter and has covered government, business, education, technology and much more. He was a reporter for the Triangle Business Journal, Raleigh News and Observer and most recently a tech reporter for CRN. He was also a top wedding photographer for many years, traveling across the country and around the world. He lives in Raleigh with his wife and two children.

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