Enterprise data cloud platform Cloudera which was built on open-source technology, is all set to go private. Private equity firms KKR and Clayton Dubilier and Rice are nearing a deal to buy out Cloudera at a valuation of $5.3 billion. The private equity firms buy out the software firm at $16 a share, or about a 24% premium to its previous close.
The USA-based Cloudera delivers an enterprise data cloud for any data, from the Edge to AI. It caters to industries including finance, healthcare, and government agencies.
Potential acquisition deals after a year on the shelf
Cloudera had explored a potential sale since mid-2020 after receiving takeover interest. Summer of 2019 onwards Cloudera’s revenues dropped suddenly, and its then-CEO was ousted. There have been speculations that the Cloudera board was seeking an exit. Since then, Santa Clara, California-based software company was working with a financial advisor and was talking with potential buyers, including private equity firms.
Following the acquisition, Cloudera will continue to operate as a private company. The company also announced two acquisitions on June 1, 2021, of Datacoral and Cazena. Cloudera also reported financial results for the first quarter of fiscal 2022, described as the announcement trifecta.
Cloudera CEO Rob Bearden said the deal would provide value to shareholders while accelerating the company’s “Long-term path to hybrid cloud leadership for analytics. 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.”
If the deal is successful, it would mark another chapter for Cloudera that’s struggled to make money on products related to open-source software, which is usually free to use. Major technology companies, including Amazon.com, Alphabet, and Microsoft, have also pushed into some of the cloud software products that are Cloudera’s specialty.
John Park, a partner with KKR and its head of Americas Technology Private Equity, said KKR is looking forward to helping Cloudera move forward as a private company. “We have followed the Cloudera story closely for several 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,” he said.