Big Data Company Cloudera To Go Private In $5.3 Billion Deal

Cloudera is being acquired by private equity investment companies CD&R and KKR for $16.00 per share with the transaction expected to close by the end of 2021.

Cloud data management company Cloudera is being taken private in a $5.3 billion acquisition deal by private equity firm Clayton, Dubilier & Rice (CD&R) and global investment company KKR, Cloudera said Tuesday.

Under the definitive agreement Cloudera shareholders will be paid $16.00 per share in cash, which the company said represents a 24 percent premium to the May 28 closing price of the company’s stock and a 30 percent premium to the 30-day volume weighted average share price.

The all-cash deal, which will result in publicly traded Cloudera becoming a privately held company, has been unanimously approved by Cloudera’s board of directors and requires shareholder approval.

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The acquisition, which is also subject to customary closing conditions and antitrust approval, is expected to be completed in the second half of 2021.

Activist investor Carl Icahn acquired an 18 percent stake in Cloudera in 2019, gaining two seats on the board, and last year there were reports that the company was exploring the possibility of a sale. In today’s announcement the company said that “entities related to Icahn Group” that collectively hold 18 percent of Cloudera’s outstanding shares have agreed to vote their shares in favor of the sale to CD&R and KKR.

Cloudera shares, which closed at $12.86 per share Friday, immediately gained about 24 percent or $3 per share on news of the deal, hovering around $15.95 per share at midday.

“This transaction provides substantial and certain value to our shareholders while also accelerating Cloudera‘s long-term path to hybrid cloud leadership for analytics that span the complete data lifecycle - from the Edge to AI,” said Rob Bearden (pictured), Cloudera CEO, in a statement.

“We believe that as a private company with the expertise and support of experienced investors such as CD&R and KKR, Cloudera will have the resources and flexibility to drive product-led growth and expand our addressable market opportunity,” Bearden said.

Cloudera, based in Santa Clara, Calif., also said Tuesday that the company is acquiring two big data Software-as-a-Service companies: Cazena, a Waltham, Mass.-based developer of software used to build data lakes; and Datacoral, a San Francisco-based provider of no-code data integration and data pipeline software. Cloudera did not disclose the financial terms of either acquisition.

Cloudera has had a mixed track record since its 2008 founding as a high-visibility company among a sea of big data startups. The company originally based its product lineup on the Hadoop big data platform, which has not been as widely adopted as some expected.

After competing for years against rival Hortonworks, the two companies merged in January 2019. The company initially struggled as it merged the two companies and their product portfolios and then-CEO Tom Reilly stepped down in June 2019, replaced by former Hortonworks CEO Bearden.

Tuesday Cloudera said that revenue in its fiscal 2022 first quarter (ended April 30, 2021) was $224.3 million, up 7 percent from $210.5 million one year earlier. The company reported a $40.4 million loss for the quarter compared to a $58.0 million loss one year before.

For all of fiscal 2021 (ended Jan. 31, 2021) Cloudera reported revenue of $869.3 million, up more than 9 percent from $794.2 million in fiscal 2020. The company reported a $162.7 million loss for fiscal 2021, down from the $336.6 million loss reported for fiscal 2020.

“We very much look forward to working with Cloudera as it continues to execute its long-term transformation strategy,” said Jeff Hawn, CD&R Operating Partner who will serve as chairman of the company upon the close of the transaction.

“The company has made significant progress establishing the Cloudera Data Platform as a leader in hybrid and multi-cloud analytics, and we believe that our experience and capabilities can offer valuable support to accelerate expansion into new products and markets,” Hawn said in a statement.

“We have followed the Cloudera story closely for a number of years and are pleased to be supporting its mission of helping companies make better use of their data in the ever-evolving hybrid IT environment,” said John Park, KKR partner and head of Americas Technology Private Equity, also in a statement. ”We are excited to contribute to Cloudera‘s accelerated innovation efforts as a private company.”