Enterprise data analytics and cloud company Cloudera is being taken private in an all-cash $5.3 billion transaction with affiliates of private equity companies Clayton, Dubilier & Rice and KKR.
The deal is expected to close in the second half of 2021.
“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, CEO of Cloudera, 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.”
Billionaire activist investor Carl Icahn’s Icahn Group holds about 18% of Cloudera’s common stock through various entities, which have signed an agreement to support the transaction. Intel was a longtime Cloudera backer and its second-largest stock holder up until last December, when Cloudera repurchased Intel’s roughly 26 million shares for $314 million. Cloudera has only been publicly traded for four years; its IPO was in 2017. The following year, it combined with HortonWorks in a “merger of equals” transaction that valued the combined entity at $5.2 billion, betting that it would become a powerhouse company that would build the “first enterprise data cloud from the edge to AI.” Then in 2019, Icahn revealed that he had targeted Cloudera with the purchase of a major stake, which resulted in Icahn Group having two members on Cloudera’s board of directors.
Jeff Hawn, the CD&R operating partner who will become chairman of Cloudera when the transaction closes, said that Cloudera “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 has previously served as chairman and CEO of Quest Software, Vertafore, and Attachmate; he joined CD&R last year.
“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. “We are excited to contribute to Cloudera’s accelerated innovation efforts as a private company.”
The deal does include a 30-day period during which Cloudera can solicit, consider or initiate alternative acquisition deals with other buyers, plus another 10 days to negotiate such an agreement. That period expires July 1.
Cloudera made two other announcements in conjunction with the private equity acquisition: its first-quarter results, in which its revenues grew 7% year-over-year but it continued to post significant losses; and two software-as-a-service acquisitions of its own, which are expected to close prior to the acquisition by the private equity firms. Terms of Cloudera’s deals with Datacoral and Cazena were not disclosed.
Cazena was described as offering software that “powers instant cloud data lakes, making it possible to accelerate time to analytics and AI/ML from months to minutes.” Meanwhile, Cloudera said that Datacoral “adds an easy-to-use SaaS platform to the Cloudera CDP portfolio that provides simple, reliable access to more than 80 common data sources.”
The additions of Datacoral and Cazena, the company said, will support its public cloud offering and “expand Cloudera’s market opportunity as the company moves beyond big data to self-service. The two acquisitions mark an important milestone as Cloudera continues to execute its strategic plan to build a leader in the hybrid cloud space.”
Bearden said that the buys will “Cloudera to usher in a new era of low-code, no-code self-service by automating complex operations – enabling our customers to focus on getting value from their data rather than configuring, operating and managing the underlying infrastructure. Both businesses will enable our combined customers to enjoy a reduction in complexity and faster time to value for their data initiatives, leading to improved insights, faster innovation, and stronger engagements with their customers and partners.”
In terms of its fiscal first quarter of 2022 results, Cloudera reported total revenues of $224.3 million, up 7% from the same period last year. The bulk of that, $200.7 million, was from subscription revenue. The company posted a net loss for the quarter of $40 million, compared to a loss of $58 million during the year-ago quarter.
Due to the pending acquisition, Cloudera cancelled its scheduled quarterly call with investors to discuss the results and said it would not provide any financial guidance for the rest of the year.
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