Cloudera to go private in $5.3B deal

Enterprise data cloud company Cloudera is set to become a private company four years after going public, after receiving a $5.3 billion all-cash bid from affiliates of private equity firms KKR and Clayton, Dubilier & Rice (CD&R).

Cloudera, which counts renowned activist investor Carl Icahn as its largest shareholder, offers a range of cloud-based software and analytics to help enterprises manage their data and generate insights from hybrid and multicloud environments — at the heart of this is the Cloudera Data Platform (CDP), which emerged back in 2019 following its merger with rival Hortonworks.

Cloudera recently expanded its CDP to Google Cloud, having initially supported AWS and Microsoft’s Azure, while Cloudera’s major cloud rivals have also expanded deeper into areas that Cloudera has traditionally specialized in.

News of a potential acquisition first surfaced last June, with IBM touted as one potential suitor alongside a host of private equity firms.

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Cloudera’s shares had hit rock bottom in 2019 after missing revenue targets, but with cloud infrastructure spending going through the roof during the pandemic, the Palo Alto-based company’s fortunes have improved somewhat. However, its shares have still languished at around $12 over the past few months, notably lower than its $15 IPO price back in 2017.

The $5.3 billion price tag represents a purchase price of $16 per share, a 24% premium on last Friday’s closing price, as the acquirers try to convince shareholders to greenlight the sale.

Cloudera’s impending acquisition comes on the same day as it revealed two acquisitions of its own when it snapped up SaaS companies Datacoral and Cazena, a move that will help Cloudera accelerate its “move beyond big data and into self-service.”

Patrick Moorhead, principal analyst at Moor insights & Strategy, said that going private is a good move for Cloudera, as it gives it the capital and flexibility to “dive head first into SaaS.”

“The company invented the entire concept of a data life cycle, implemented initially on-premises, then extended to private and public clouds,” Moorhead said. “It has been doing really well, but to get into SaaS quickly before the aperture shuts required it to go private. I am expecting an incredible amount of investment to build out this new capability that I don’t think the public markets would have appreciated. Adding Enterprise SaaS opens it up to all non-IT audiences like business leaders and department data jockeys.”

All going well, Cloudera said that it expects the transaction to close some time in the second half of 2021. However, the terms of the acquisition agreement includes a 30-day “go shop” period which ends on July 1, which allows Cloudera to explore alternative deals should other interested parties emerge.

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