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Cisco Offered $7 Billion-Plus for DataDog As Company Prepares to IPO

Gillian Tan, Liana Baker and Ian King

(Bloomberg) -- Cisco Systems Inc. approached software company Datadog Inc. in recent weeks with a takeover offer significantly higher than the $7 billion valuation it aimed for in its initial public offering, according to people familiar with the matter.

Datadog rebuffed the advance to pursue a stock listing because it felt it could be worth more as a public company over time, according the people, who requested anonymity because the talks were private. Talks between Cisco and Datadog are no longer active and Datadog is committed to going public, they said.

A representative for Cisco declined to comment. Datadog couldn’t immediately be reached for comment.

Cisco rose less than 1% to $49.72 at 10:12 a.m. in New York trading, for a market value of about $211 billion. Several rivals to Datadog also gained, including New Relic Inc., up 5.8%, Splunk Inc., which rose 3.9% and Elastic NV, which rose 3.1%.

Datadog raised $648 million in its U.S. IPO Wednesday, selling 24 million shares for $27 each after marketing them at $24 to $26. The listing values Datadog at $7.83 billion.

Software companies that power business processes have delivered some of this year’s best IPO debuts thanks to high margins and solid revenue. Zoom Video Communications Inc. and Crowdstrike Holdings Inc. have doubled in value since they began trading and are among the ten best performing offerings this year, according to data compiled by Bloomberg.

In 2017, Cisco succeeded in buying a company on the eve of its IPO. It acquired AppDynamics Inc. for $3.7 billion right before the data analytics company was set to price its listing.

(Updates share prices in fourth paragraph, details about IPO in fifth.)

--With assistance from Crystal Tse.

To contact the reporters on this story: Liana Baker in New York at lbaker75@bloomberg.net;Gillian Tan in New York at gtan129@bloomberg.net;Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Liana Baker, Matthew Monks

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