Cloudera Agrees to $5.3B Private Equity Buyout; Stock Up 24%

Cloudera (CLDR) has agreed to be acquired by private equity firms CD&R and KKR & Co (KKR). The deal values the enterprise data cloud provider at $5.3 billion. Cloudera stock jumped 23.87% on Tuesday to close at $15.93 following the buyout announcement.

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Cloudera’s board is backing the deal to take the company private and recommends that shareholders do the same. Icahn Group, a major Cloudera shareholder with an 18% stake in the company, has also endorsed the deal.

The all-cash transaction will see Cloudera shareholders receive $16 per share. That represents a 24% premium to the stock’s closing price on May 28. It also represents a 30% premium to the stock’s volume-weighted average price over the last 30 days.

“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,” commented Cloudera CEO Rob Bearden.

Cloudera will have 30 days to seek a better buyout deal than what CD&R and KKR have offered. If no better alternative offer comes up, Cloudera and the private equity firms expect to close the transaction in the second half of 2021.

As it prepares to go private, Cloudera is making two strategic acquisitions. The company has announced agreements to purchase SaaS companies Datacoral and Cazena. Cloudera said the acquisitions, which it hopes to complete by July 31, will expand its market opportunity. (See Cloudera stock analysis on TipRanks)

Needham analyst Jack Andrews assigned Cloudera stock a Hold rating without providing a price target. The analyst believes Cloudera shareholders are getting a good deal with the private equity buyout.

“We note CLDR has been the target of acquisition rumors since mid-2020, and thus we view the probability of a higher offer as unlikely since other financial buyers have had the opportunity to perform due diligence on a potential deal. Our historical M&A analysis implies that the valuation multiple is generous relative to other deals on both a revenue and gross margin basis,” noted Andrews.

CLDR scores a 5 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.