Cisco Moves Forward with Acquisition of Application Performance Monitoring Company AppDynamics

Surprising market watchers last week, AppDynamics’ planned IPO, which was expected to be the first big technology initial public offering of 2017, got canceled as Cisco announced it is snapping up the privately held application intelligence software company based in San Francisco.

The purchase, in which Cisco will acquire AppDynamics for approximately $3.7 billion in cash and assumed equity awards, is expected to close in Cisco’s third fiscal quarter of 2017.

Besides the price, the Cisco purchase of AppDynamics was notable since it was announced in the same week that AppDynamics was to have made its debut on the NASDAQ.  The looming IPO, market observers have noted, may have created heightened urgency, and should be noted by fellow unicorns.

Commenting on the acquisition in a Cisco blog post, Rob Salvagno, head of Cisco’s M&A and venture investment team, wrote: “Digitization and the transition to cloud are forcing the worlds of IT and business to blend together. In the digital economy, applications are critical. Combining real-time visibility and intelligence at the network, security and application layers is transformational for companies. It can provide them with insight into the state of their business and, most importantly, into the quality of their customers’ experiences. To drive this transformation, we are excited to announce Cisco’s intent to acquire AppDynamics, Inc., a leading privately held application intelligence software platform!”

AppDynamics will continue to be a led by CEO David Wadhwani as a new software business unit in Cisco's IoT and Applications business, reporting to Rowan Trollope, Cisco senior vice president and general manager of Cisco's Internet of Things and Applications Business Group.