Jefferies analysts wrote in a note the Federal Reserve putting the brakes on interest rate hikes has given acquirers more certainty around their funding costs, helping dealmaking.
Cisco's deal valued Splunk at 7 times projected 12-month revenue, according to Jefferies.
"We note that the typical security company with 20% growth trades at about 7 times (sales)," BTIG analysts wrote in a note last week.
Private software companies may also be more receptive to takeovers.
"A tidal wave of software M&A (is) on the horizon," Wedbush analysts wrote in a note last week.
Persons:
Chuck Robbins, David Chen, Morgan Stanley, Chen, Jefferies, Keith Skirbe, Houlihan Lokey's, Milana Vinn, Anirban Sen, Anna Driver
Organizations:
Cisco Systems, Cisco, Crowdstrike Holdings, Microsoft, Adobe, Oracle, Francisco Partners, TPG Inc, Federal Reserve, IBM, Reuters Graphics Reuters, Jefferies, Thomson
Locations:
New York