Splunk Announces $1 Billion Investment from Silver Lake
Splunk (NASDAQ: SPLK) announced a $1 billion investment from Silver Lake in convertible senior notes to support its transformation into a cloud-first company. The funds will be used for growth initiatives and a share repurchase program worth up to $1 billion. Splunk reported a remarkable 83% year-over-year increase in Cloud annual recurring revenue (ARR) to $877 million, with 56% of bookings from the Cloud. Silver Lake's Chairman, Kenneth Hao, will join Splunk's Board, expanding it to 11 members, 10 of whom are independent. The investment terms include a conversion price of $160 per share, representing a 30% premium.
- Cloud ARR increased to $877 million, up 83% year-over-year.
- 56% of software bookings from Cloud, showing strong market demand.
- Share repurchase program authorized for up to $1 billion to offset dilution.
- None.
Splunk Inc. (NASDAQ: SPLK), provider of the Data-to-Everything Platform, today announced that Silver Lake, a global leader in technology investing, will make a
“We’ve significantly evolved our business since we began our transformation to become a cloud-first company over two years ago, and today’s announcement reaffirms the strength of our business fundamentals, cloud strategy and high-growth trajectory,” said Doug Merritt, President and CEO of Splunk. “Silver Lake has a strong reputation and track record of investing in innovative technology companies, and with their support, we are accelerating toward our goals as we deliver the most scalable and powerful data platform in the cloud.”
Earlier this month, Splunk reported Cloud annual recurring revenue (ARR) of
“We have long admired Splunk’s world-class team and technology, and we believe the company is now at an important inflection point,” said Kenneth Hao, Chairman and Managing Partner of Silver Lake. “It has become increasingly clear that a cloud-driven transformation is critical to modernization and Splunk is ideally positioned to help organizations throughout the world manage the complexity associated with this transition. We are confident in the opportunities ahead and eager to work with Doug and his team to support Splunk’s next phase of growth.”
In connection with Silver Lake’s investment, Hao will be appointed to Splunk’s Board of Directors. With Hao’s appointment, Splunk’s Board will comprise 11 members, 10 of whom are independent.
“Ken brings more than 30 years of experience in technology investing and working with management teams to build and grow great companies, and we are excited to welcome him to the Splunk Board,” said Graham Smith, Chair of the Splunk Board. “Through this partnership with Silver Lake, Splunk is well positioned to build on the momentum the team has generated and continue to enable customers to break barriers across IT, Security and DevOps while driving sustainable value for our stockholders.”
Terms of the Transaction and Share Repurchase Program
Under the terms of the investment, Silver Lake will purchase
In connection with this transaction, Splunk’s Board has authorized the repurchase of up to
Additional information regarding this announcement may be found in a Form 8-K that will be filed today with the U.S. Securities and Exchange Commission.
Advisors
Goldman Sachs & Co. LLC is acting as lead financial advisor and Centerview Partners is also acting as financial advisor to Splunk, and Wilson Sonsini Goodrich & Rosati and Wachtell, Lipton, Rosen & Katz are serving as Splunk’s legal advisors in the transaction.
Simpson Thacher & Bartlett is serving as legal advisor to Silver Lake.
About Kenneth Hao
Ken Hao joined Silver Lake in 2000 and is Chairman and a Managing Partner. Hao currently serves as a director on the board of NortonLifeLock as well as on the boards of portfolio companies ServiceMax and SolarWinds. He also led the establishment of the firm's offices in Asia and led Silver Lake's investments in Alibaba Group and Ant Financial. Previously, he served as a director of Broadcom, SMART Global Holdings, NetScout Systems and UGS Corp. (acquired by Siemens AG). Prior to joining Silver Lake, Hao was with Hambrecht & Quist (now part of JP Morgan) from 1990-1999, where he served as a Managing Director. Outside of Silver Lake, Hao serves on the boards of UCSF and Universal Tennis. Hao graduated from Harvard College with an A.B. in Economics.
About Splunk Inc.
Splunk Inc. (NASDAQ: SPLK) turns data into doing with the Data-to-Everything Platform. Splunk technology is designed to investigate, monitor, analyze and act on data at any scale.
Splunk, Splunk>, Data-to-Everything, D2E and Turn Data Into Doing are trademarks and registered trademarks of Splunk Inc. in the United States and other countries. All other brand names, product names, or trademarks belong to their respective owners. © 2021 Splunk Inc. All rights reserved.
About Silver Lake
Silver Lake is a leading global technology investment firm, with more than
Safe Harbor Statement
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding Splunk’s business strategy, plans and objectives for future operations; the investment by Silver Lake, and the use of proceeds and benefits thereof; the expected election of a director; the share repurchase program and the factors that will impact the amount and timing of purchases, if any; Splunk’s market opportunity, including trends in the pace of customer digital and cloud transformation and the importance of data and our ability to leverage these trends; the growth of our cloud business; the market for data-related products and trends in this market, future growth and related targets; expectations for our industry and business, such as our business model, customer demand, our partner relationships, customer success and feedback, expanding use of Splunk by customers, and expected benefits and scale of our products. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: risks associated with Splunk’s strategies, priorities, or plans taking longer to execute than anticipated; the continuation or tapering of the impact of the COVID-19 pandemic and related public health measures on our business, as well as the continuation or tapering of the impact of the COVID-19 pandemic on the overall economic environment, including customer buying capacity, urgency and patterns; and general market, political, economic, business and competitive market conditions.
Additional information on potential factors that could affect Splunk’s financial results is included in the company’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2021, which is on file with the U.S. Securities and Exchange Commission (“SEC”) and Splunk’s other filings with the SEC. Splunk does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
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FAQ
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