Filing Flows › Cisco Systems (CSCO) › Takeover & LBO
Is Cisco Systems (CSCO) a takeover target?
A leveraged buyout at today's price plus 30% ($124.44 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $66.14 a share (−31% against today's $95.72). At $502.5B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect. Historically 2.4% of companies with its figures were bought within a year (0.47× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $124.44 | today's $95.72 plus 30% |
| × shares | 3,982.0 million | |
| = Equity value | $495.5B | |
| + Debt refinanced | $22.9B | |
| − Cash | $15.9B | |
| = Enterprise value | $502.5B | 31.3× EBITDA of $16.1B |
| Fees | $10.0B | 2% of the price |
| New debt | $88.4B | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $424.1B | 83% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $68.4B | $17.4B | $6.8B | $6.9B | $81.5B |
| Year 2 | $73.0B | $18.5B | $6.2B | $8.2B | $73.3B |
| Year 3 | $77.0B | $19.5B | $5.6B | $9.6B | $63.7B |
| Year 4 | $80.3B | $20.4B | $4.9B | $10.9B | $52.8B |
| Year 5 | $82.7B | $21.0B | $4.0B | $12.1B | $40.7B |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 24.2× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $506.9B | |
| − Debt left | $40.7B | |
| = Buyer's equity | $466.2B | |
| Money multiple | 1.10× | on $424.1B put in |
| Buyer's yearly return (IRR) | 1.9% |
Price against return
What the buyer makes at other premiums over today's $95.72; the IRR reaches 20% at $66.14 a share.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $105.29 | 6.1% |
| 20% | $114.86 | 3.9% |
| 30% | $124.44 | 1.9% |
| 40% | $134.01 | 0.1% |
| 50% | $143.58 | −1.5% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $63.3B | |
| EBITDA, last 12 months | $16.1B | 25.4% of revenue |
| Depreciation and amortization | $700M | |
| Capital spending | $1.4B | |
| Debt | $22.9B | |
| Cash | $15.9B | |
| Share price | $95.72 | on Nov 6, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 17% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Cisco Systems would cost about $124.44 a share, $495.5B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $107.21 | $426.9B |
| Median | 30% | $124.44 | $495.5B |
| High end (a quarter paid more) | 31% | $125.39 | $499.3B |
The odds, from history
Historically 2.4% of companies with its figures were bought within a year (0.47× the average). Its figures put it in decile 1 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Cisco Systems' latest quarter
Cisco Systems, Q4 FY26: revenue $17.3B (+18% year over year), operating margin 24.7%, net earnings $3.9B, operating cash flow $5.4B. The chart follows the revenue to costs, profit and cash.
Questions
Is Cisco Systems being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Cisco Systems?
A leveraged buyout at today's price plus 30% ($124.44 a share) would return about 2% a year to a private-equity buyer over 5 years; the most a buyer could pay for a 20% return is $66.14 a share (−31% against today's $95.72). At $502.5B it would be larger than any buyout on record (the model flags anything over $60 billion), so this is a thought experiment more than a prospect.
What would a takeover of Cisco Systems cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Cisco Systems would cost about $124.44 a share, $495.5B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.