Ken Hao, Chairman and Managing Partner, to
Join Splunk’s Board of Directors
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 $1 billion investment in
convertible senior notes to support the continued transformation of
its business. Splunk expects to use the proceeds from the new
investment to fund growth initiatives and manage its capital
structure, including a newly authorized share repurchase program of
up to $1 billion that will be executed over time.
“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 $877 million for the first fiscal quarter 2022, an
increase of 83% year-over-year. Splunk finished its first quarter
with 56% of its software bookings from Cloud and 203 customers with
Cloud ARR greater than $1 million, up 99% year-over-year.
“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 $1
billion in aggregate principal amount of Splunk’s convertible
senior notes (the “Notes”). The Notes will have an initial
conversion price of $160.00 per share of Splunk’s Common Stock,
subject to customary anti-dilution and other adjustments. The
initial conversion price of $160.00 represents a 30% premium to the
volume-weighted average closing price of the Common Stock over a
10-day period ending on June 21, 2021. The Notes will mature in
July 2026, unless earlier repurchased, redeemed or converted. The
Notes will bear interest at 0.75% per year.
In connection with this transaction, Splunk’s Board has
authorized the repurchase of up to $1 billion of its common shares
in the open market, based on prevailing market prices, or in
privately negotiated transactions. The repurchase is intended to
offset the dilutive effect of the Notes.
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 $83 billion in combined assets under management and
committed capital and a team of professionals based in North
America, Europe, and Asia. Silver Lake’s portfolio companies
collectively generate more than $196 billion of revenue annually
and employ more than 448,000 people globally. For more information
about Silver Lake and its portfolio, please visit Silver Lake’s
website at silverlake.com.
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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version on businesswire.com: https://www.businesswire.com/news/home/20210622005703/en/
Media Contact Patricia Hogan Splunk Inc.
press@splunk.com
Investor Contact Ken Tinsley Splunk Inc.
ir@splunk.com
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