Cloudera goes into a $ 5.3 billion deal privately

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    Company data specialist Cloudera (NYSE: CLDR) has lagged the broader market since it went public in 2017. Activist investor Carl Icahn got involved in the company a few years ago and began pushing for a company sale to maximize shareholder value. Last year there were rumors of a possible takeover.

    Well, the infamous corporate raider just got what it was looking for when Cloudera announced this week that a $ 5.3 billion deal will go private.

    Just $ 1 more than the IPO price

    Private equity giants Clayton, Dubilier & Rice (CD&R) and KKR have agreed to acquire Cloudera for $ 16 per share in cash, a 24% premium over Friday’s closing price. That award valued the company at $ 5.3 billion.

    Additionally, the $ 16 per share offering is just $ 1 higher than Cloudera’s $ 15 IPO. Investors who bought their way straight to the public debut three years ago and are still holding these stocks will see only modest profits. Chip-Juggernaut Intel (NASDAQ: INTC) had previously invested in Cloudera at $ 30.92 per share prior to going public, but Cloudera repurchased that stake in late 2020 for only $ 12.05 per share.

    “This transaction provides significant and secure value to our shareholders while accelerating Cloudera’s long-term path to hybrid cloud leadership for analytics that span the entire data lifecycle – from edge to AI,” said Robert Bearden, CEO of Cloudera, in an explanation. “We believe that as a private company with the expertise and support of seasoned investors such as CD&R and KKR, Cloudera has the resources and flexibility to drive product-driven growth and expand our addressable market opportunities.”

    Cloudera has a 30-day go-shop period during which it can solicit competing offers from alternative applicants.

    2 more announcements

    In separate news, Cloudera also reported on the results for the first quarter. Total revenue increased 7% to $ 224.3 million and annual recurring revenue (ARR) is now $ 805 million. Adjusted gross margin on subscriptions rose 91%, and Cloudera closed the quarter on $ 903 million in cash. It all resulted in adjusted earnings per share of $ 0.12.

    The company also announced that it will acquire two additional Software-as-a-Service (SaaS) companies, Datacoral and Cazena. Datacoral operates a cloud-based data pipeline platform that integrates with other data lakes and data warehouses, while Cazena is an automated data lake that can boost the performance of artificial intelligence and machine learning (AI / ML) workloads. Cloudera did not disclose financial terms on either transaction, but both transactions are expected to close this quarter.

    The other press releases are no longer relevant to public investors due to the upcoming takeover, so Cloudera has canceled its conference call on the results accordingly. The deal with CD&R and KKR is expected to close in the second half of 2021.

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    Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Millennial Money is part of The Motley Fool Network. Millennial Money has a disclosure policy.

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