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Splunk to pick up SignalFx
Posted on Thursday, 22 August 2019 10:30
Splunk is buying US-based software-as-a-service monitoring and analytics platform SignalFx for USD 1.05 billion.

The consideration consists of 60.0 per cent in cash and 40.0 per cent in common stock.

Pending customary closing conditions and regulatory reviews, the deal is due to complete during the second half of fiscal 2020.

Jason Child, head of finances for Splunk, said the company would fund the majority of the purchase using cash on hand.

He added the consideration, including the target’s employee retention incentives, will result in a total dilution of less than 3.0 per cent.

Based in California, SignalFx provides monitoring and metrics for cloud infrastructure, microservices and other applications.

Its offerings include streaming analytics, distributed tracing and smart alerts, which can review historical data and eliminate false positives.

SignalFx operates across the US and has sites in Europe, as well as in Australia.

Doug Merrit, chief executive of Splunk, said: “Data fuels the modern business, and the acquisition of SignalFx squarely puts Splunk in position as a leader in monitoring and observability at massive scale.

“SignalFx will support our continued commitment to giving customers one platform that can monitor the entire enterprise application lifecycle.”

The deal, which will enable the two companies to cut costs and increase revenue, is in line with the buyer’s full year non-generally accepted accounting principles operating margin target.

Also headquartered in California, Splunk provides information technology and analytics to help customers monitor and investigate all forms of business, security and Internet of Things data.

Its technology includes the Phantom platform, which automates repetitive tasks and allows users to process malware email alerts in around 30 seconds.

The group has over 4,700 employees and its clients include the likes of Coca-Cola, Orbis, Blackstone and Tesco.

So far in 2019, there have been 6,383 deals targeting data processing, hosting and related services providers, according to Zephyr, the M&A database published by Bureau van Dijk.

The largest of these, and fifth-biggest on record for this sector, involved Softbank selling its 2.8 per cent stake in Cayman Islands-based Alibaba Group Holding, through West Raptor Holdings, for JPY 1,200 billion (USD 11.09 billion).

© Zephus Ltd