KKR, CD&R Strike $5.3 Billion Deal to Buy Cloudera -- Update

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 [e-mail] and Cara Lombardo at [e-mail]

(END) Dow Jones Newswires

June 01, 2021 07:45 ET (11:45 GMT)

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