Cloudera Repurchases Intel’s Stake For $314M; Shares Rise

Enterprise data cloud company Cloudera has repurchased Intel’s (INTC) entire stake in the company for $314.1 million. Shares rose 1.5% in the extended trading session on Wednesday.

Specifically, Cloudera (CLDR) repurchased 26 million shares of its common stock held by Intel at a price of $12.05 per share. The company stated that the transaction does not change its existing commercial or partner relationship with Intel.

Cloudera also announced the successful completion of a covenant lite, $500 million senior secured term loan (term loan B). The term loan B has a seven-year tenor and will bear interest at LIBOR plus 250 basis points. The company intends to use the term loan proceeds for general corporate purposes and share repurchases.

CEO Rob Bearden stated, “We are very pleased that we were able to immediately put to work a significant portion of our recently announced $500 million share repurchase authorization at an attractive price. Buying back Intel’s position enables us to retire more than 26 million shares of Cloudera common stock outstanding.”

“Also, the strength of our business and current debt market conditions allowed us to achieve loan terms far more favorable than we had expected, making these events even more impactful on our capital structure while preserving substantial balance sheet flexibility,” added Bearden. (See CLDR stock analysis on TipRanks)

Earlier this month, Citi analyst Tyler Radke increased the price target on Cloudera to $14 from $12 and reiterated a Hold rating after the company’s 3Q results “surprised to the upside.” Radke stated that Cloudera struck a friendlier shareholder tone in 3Q with stable growth, improved profitability and buybacks. However, he continues to be on the sidelines as he believes that secular risks remain.

Meanwhile, the rest of the Street is cautiously optimistic, with a Moderate Buy analyst consensus backed by 2 Buys and 6 Holds. Shares have risen about 29% year-to-date. The average price target of $15 indicates that shares are fully priced at current levels.