Cash-Rich Cisco Shifts to Net Debt Position for Growth, Returns
- Splunk deal signals change from decades of net cash holdings
- CFO Herren says focus is investment, shareholder returns
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For Cisco Systems Inc., the $28 billion acquisition of Splunk Inc. marks not only its biggest diversification effort to date but a historic shift to a net debt capital position designed to bolster growth and shareholder returns.
The San Jose, California-based provider of information technology and networking gear funded the Splunk transaction with a mix of cash, commercial paper and long-term debt, including $13.5 billion in bonds last month. Cisco joined a flurry of recent borrowers tapping the investment-grade market to finance mergers and acquisitions.