The Silicon Valley tech giant will pay $157 per share in Splanck INC.
The purchase price is equivalent to about 13 percent of Cisco's market capitalization, a significant figure for a company that has historically avoided big deals.
Before Splanc, Cisco's biggest deal ever was the $6.9 billion purchase of cable receiver maker Scientific Atlanta in 2006. At the time, Cisco's market capitalization was just over $100 billion.
Chuck Robbins, Cisco Chairman and CEO of Cisco, said in a statement, "Our combined capabilities will drive the next generation of AI-powered security and surveillance. By detecting and responding to threats with predictions and prevention, we will help make organizations of all sizes safer and more resilient."
Chuck Robbins, CEO of Cisco, emphasized the importance of AI and the use of the AI power that comes with Splunk technology to protect networks.
The boards of directors of both companies approved the acquisition, which is expected to be completed by the end of the third quarter of 2024.
Splanc shares ended Thursday's session up 21 percent, while Cisco shares closed down 4 percent.
Splanc is a cybersecurity company that helps organizations monitor and analyze their data to reduce the risk of breaches and resolve technical issues faster.
The transaction still needs to be approved by Splanck's shareholders.
In fiscal 2022, Cisco changed its core business name to secure and resilient networking, focusing on the need to integrate security into network equipment. The company has a separate reporting module called End-to-End Security, which consists specifically of security products.
Revenue in its core business rose 22 percent in the fiscal year ended July 29 to $29.1 billion, and its security unit saw sales rise 4 percent to $3.9 billion.
Cisco's stock has underperformed the Nasdaq this year, rising 12 percent, while the tech index jumped 27 percent.