Cisco offered $7B-plus for DataDog as company prepares to IPO

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(Bloomberg) --Cisco Systems Inc. approached software company Datadog Inc. in recent weeks with a takeover offer significantly higher than the $7 billion valuation it is aiming for in an 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 Talks between Cisco and Datadog are no longer active and Datadog is committed to going public, they said.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.

Datadog this week boosted its IPO price range to $24 to $26 per share from $19 to $22 per share, according to a filing, valuing it at as much $7.5 billion at the top of that range. The IPO is expected to price Wednesday.

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.

--With assistance from Crystal Tse

Bloomberg News