Hellman & Friedman, Starboard score big wins in Splunk's $28 bln sale -sources
21/09/2023 18:36
By Svea Herbst-Bayliss and Milana Vinn
NEW YORK, Sept 21 (Reuters) - Private equity firm
Hellman & Friedman and activist hedge fund Starboard Value are
walking away with lucrative returns from their investments in
Splunk Inc SPLK.O following a deal on Thursday to sell the
cybersecurity firm to Cisco Systems Inc CSCO.O for $28 billion
in cash.
Hellman & Friedman spent $1.38 billion to acquire a 7.5%
stake in Splunk according to a statement in March 2022. That
translates as $116 per share and yields 35% return based
Thursday's deal price of $157 per share.
Hellman & Friedman did not immediately respond to a request
for comment.
Starboard revealed it was an investor in Splunk 12 months
ago and pushed for changes to improve the company's growth and
profitability, highlighting it was a valuable acquisition
target.
The hedge fund paid somewhere in the mid-$80s per share for
its stake, according to people familiar with the matter,
representing a close to 85% return.
Starboard's latest disclosure shows it owned a 2.46% stake
in Splunk as of the end of June, that would be worth $628
million at the Cisco deal price, although the exact amount of
shares it had bought and sold prior to Thursday could not be
learned.
Starboard did not immediately respond to a request for
comment.
A major investor that did less well was Silver Lake. The
private equity firm stands to roughly break even after spending
$1 billion on a convertible bond in 2021 with a conversion price
of $160 per share. It expects to record a small profit after
adjusting for a customary make whole provision at deal closing
as scheduled in 2024.
Silver Lake declined to comment.
(Reporting by Milan Vinn in New York and Svea Herbst-Bayliss in
Rhode Island; Editing by Kirsten Donovan)
((svea.herbst@thomsonreuters.com; +617 233 2138; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))