KKR, CD&R Strike $5.3 Billion Deal to Buy Cloudera -- Update
June 01 2021 - 7:59AM
Dow Jones News
By Miriam Gottfried and Cara Lombardo
Private-equity firms KKR & Co. and Clayton Dubilier &
Rice LLC agreed to buy Cloudera Inc. for roughly $5.3 billion in a
deal that would take the software company private.
The pair on Tuesday said they would pay $16 a share for the
data-cloud company, representing a roughly 24% premium to where the
shares closed Friday.
The Wall Street Journal reported Monday that the firms were
close to a deal.
Cloudera shareholders will receive $16 a share in cash, a 24%
premium to Friday's closing price, the company said Tuesday.
Founded in 2008 by a group of engineers from Alphabet Inc.'s
Google, Facebook Inc., Oracle Corp. and Yahoo Inc., Cloudera was an
early player in the open-source software framework Hadoop, which
enables large amounts of data to be processed quickly. But it
struggled to shift to the now-dominant public cloud, where it faces
steep competition from much larger firms including Amazon.com
Inc.'s Amazon Web Services.
Cloudera's shares have had a rocky run since their public-market
debut in 2017. They are trading below their initial public offering
price and are down roughly 8% this year.
Still, recent results have shown improvement in the company's
business. Cloudera in March reported revenue of $869 million for
its fiscal year ended Jan. 31, an increase of 9%, and an operating
margin of 17% compared with a negative one a year earlier. On
Tuesday, it said its first-quarter revenue rose 7% from a year
ago.
Activist investor Carl Icahn owns roughly 18% of the company and
in 2019 received two board seats as part of a settlement. The
company also tapped Robert Bearden as chief executive to succeed
Tom Reilly, who stepped down. Mr. Bearden was already a Cloudera
director and is co-founder of Hortonworks Inc., an open-source
company Cloudera bought in 2019.
The company said Mr. Icahn agreed to vote his shares in favor of
the private-equity deal. The agreement also included a so-called
go-shop period, which allows Cloudera to seek higher offers from
other buyers for 30 days.
Private-equity firms including KKR and CD&R have been
snapping up software companies, attracted by their predictable and
growing cash flows. Last summer, KKR sold Epicor Software Corp. to
a group led by CD&R for about $4.7 billion including debt.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com and Cara
Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
June 01, 2021 07:45 ET (11:45 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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