On November 13, 2018, Cloudera announced that it had entered into a definitive agreement to be acquired by Clayton, Dubilier & Rice and KKR in a transaction valued at $5.3 billion.

The transaction is expected to close in the first half of 2019. Cloudera, a leader in open source analytics, will become a private company following the close of the transaction.

This section will provide an overview of the agreement, the companies involved and the transaction terms.

Cloudera Enters into Definitive Agreement to be Acquired by Clayton, Dubilier & Rice and KKR for $5.3 Billion

Cloudera Inc., the Palo Alto-based enterprise software provider, was founded in 2008 to help companies store, process, and manage large amounts of data using Apache Hadoop. Since its founding, Cloudera has grown to become a major player in the big data market with offerings ranging from its flagship product Cloudera Enterprise—a comprehensive platform for managing and analysing data in the cloud—to products that make it easy for companies to collect and query data for business intelligence or machine learning. The company has also contributed to open source projects such as Apache Spark and HBase.

Cloudera made headlines when it became public in 2017 on the New York Stock Exchange (NYSE), becoming one of the first technology firms to list directly on a major US exchange since Snap Inc (NYSE Symbol: SNAP) went public earlier that same year. As of May 2019, Cloudera’s market capitalization was estimated at around $2 billion. Since going public, Cloudera has sought to expand organically through acquisitions, such as its acquisition of analytics company Arcadia Data and through partnerships with established tech giants like Intel (NASDAQ Symbol: INTC).

On October 30, 2019 it was announced that Cloudera had entered into definitive agreements with investors including private equity firms Clayton Dubilier & Rice and KKR & Co., who agreed to acquire all outstanding shares of Cloudera’s stock for $5.3 billion in cash through an all-cash transaction. The offer provides investors an opportunity for significant returns after just under two years since their IPO launch. The deal is expected to close during the first half of 2020 subject to customary closing conditions including shareholder approval and regulatory approvals.

Summary of the acquisition

Today, Cloudera announced the definitive agreement to be acquired by an investor consortium anchored by private equity firms Clayton, Dubilier and Rice and KKR for a total equity value of $5.3 billion. The deal will provide Cloudera with the resources to continue upskilling its customer-oriented mission.

The all-cash transaction is expected to be completed in the second half of 2021 and requires regulatory approval. Under the terms of the agreement, CD&R and KKR will each own approximately 40% of Cloudera upon closing. In addition, current stockholders of Cloudera are expected to receive $16.00 per share in cash for their shares when the transaction closes.

Cloudera’s proposed merger signals a consolidation trend in the big data analytics space, with big private equity firms being attracted to strong data science trends witnessed in recent years in both traditional markets and emerging tech clusters like artificial intelligence (AI) and machine learning (ML). Moreover, through this partnership with Clayton Dubilier & Rice and KKR will bring together strengths Cloudera can use to strategically streamline services across their business model & expand product portfolio across categories like Big Data Analytics & Cloud Service etc., add new technologies like ML & Deep Learning capabilities within existing products stack as well as explore opportunities for acquisitions or partnerships that make sense strategically for diversifying offerings going forward.

Clayton, Dubilier & Rice brings deeper experience helping companies grow through organic investments in strategic priority markets such as Europe Latin America or Asia Pacific. In contrast, KKR brings greater expertise from its portfolio investments in industries ranging from business services & software development to telecom media & technology (TMT) sectors as well as specific verticals such as healthcare insurance banking retailing & logistics which have seen increased demand due to digital transformation changes brought on by COVID-19 pandemic shocks over past year during 2020 alone…

Financial Details

The cloud-based data warehousing company Cloudera has announced that it has entered into a definitive agreement to be acquired by private equity firms Clayton, Dubilier & Rice and KKR for $5.3 billion in cash. The deal will see the firms take a majority stake in Cloudera, with the company’s current shareholders retaining a $2.4 billion stake. The agreement is subject to regulatory approvals and other customary closing conditions.

Let’s take a look at the financial details of the acquisition.

Total enterprise value of $5.3 billion

Cloudera Inc. has entered into a definitive agreement to be acquired by an investor group led by Clayton, Dubilier & Rice (“CD&R”) and KKR. The acquisition is valued at an aggregate equity value of $4.7 billion and total enterprise value of $5.3 billion, including assumed debt and net cash of approximately $500 million to be acquired at closing. Following the completion of the transaction, Cloudera common stock will no longer be listed for trading on the New York Stock Exchange or any other public market.

Clayton, Dubilier & Rice has committed significant capital to the transaction, which positions Cloudera as one of its largest long-term investments. In addition, KKR is committing existing liquid capital and banking resources to support financing this transaction and other future investments in Cloudera while also providing invaluable ​operational resources.

Cloudera will remain a private company after completing this transaction and will continue to focus on delivering best-of-breed open source technology that empowers customers to securely harness their data anywhere it resides to drive greater business outcomes.

Equity value of $4.7 billion

Cloudera Inc. (NYSE: CLDR) (“Cloudera”) today announced that it has entered into a definitive agreement with affiliates of Clayton, Dubilier & Rice and KKR for the acquisition of all outstanding shares of Cloudera common stock for $5.3 billion in cash consideration, which includes $500 million of existing cash on Cloudera’s balance sheet. The equity value of the transaction is approximately $4.7 billion based on the total outstanding shares before giving effect to the transaction.

Upon closing, Cloudera will become an AXEL (Advanced Computing Environment with Linux) Corporation supported by operating funds from two highly-regarded private equity firms, Clayton Dubilier & Rice and KKR.

The transaction values Cloudera at an enterprise value of approximately $5.3 billion at closing. It is expected to close later this year, subject to customary closing conditions, including approval by Cloudera shareholders and regulatory approvals.

Cash consideration of $3.925 billion

Cloudera Inc., a leading provider of the modern platform for data engineering, data warehousing, machine learning and analytics announced on October 7, 2020 that it has entered into a definitive agreement to be acquired by funds managed by affiliates of Clayton, Dubilier & Rice and KKR at a cash consideration of $5.3 billion. The cash consideration consists of approximately $3.925 billion in cash and approximately $1.375 billion in newly-issued KKR shares that will be exchanged for all outstanding Cloudera Class A and Class B common stock.

Clayton Dubilier & Rice will become the lead investor alongside KKR. Both firms are committed to helping Cloudera further accelerate its long-term strategy as a private company beyond what is possible as a public company. Additionally, Cloudera co-founders Mike Olson and Christophe Bisciglia will remain strategic advisors to the company following the completion of the transaction.

The transaction is expected to close in early 2021 subject to customary closing conditions including regulatory approvals, Cloudera shareholder approval, and expiration or termination of any applicable waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976.

Strategic Benefits

Today, Cloudera announced that it has entered into a definitive agreement to be acquired by Clayton, Dubilier & Rice and KKR for $5.3 Billion.

This will provide Cloudera with a great opportunity to expand its reach, strengthen its position in the market and benefit from the expertise of both KKR and Clayton, Dubilier & Rice.

The strategic benefits of this acquisition are quite immense, so let’s explore them further.

Strengthening Cloudera’s position in the data management market

Cloudera is bringing together the resources and backing of two of the most respected strategic investors in the world, Clayton, Dubilier & Rice and KKR (“CD&R/KKR”) to continue building on its cloud-native data management platform that goes beyond traditional Hadoop. With CD&R/KKR, Cloudera will have additional capital and resources to accelerate innovation, enlarge its global presence, upgrade its sales and go-to-market efforts and continue building its industry-leading partnerships.

The strategic benefits from joining forces with CD&R/KKR include:

• Increased R&D investments: Cloudera will leverage CD&R/KKRs deep pockets to boost research & development capabilities, accelerate product innovation and modernise technology components of their platform.
• Enhanced global market coverage: The new capital infusion will enable Cloudera to expand geographically, supporting their direct salesforce and partner network while increasing opportunities in new go-to marketing channels.
• Strategic partnerships with leading companies: Joining forces with two of the strongest investors provides the networks needed to drive deeper partnerships with larger partners such as Microsoft Azure and Google Cloud Platform helping them strengthen their solution for customers.
• Improved sales process from outset: Combined resources will create opportunities for upsells during client interactions and more simplified product packaging construction. As a result, customers can more quickly adopt solutions that meet their needs quicker.

Expanding Cloudera’s customer base

With the acquisition of Cloudera by Clayton, Dubilier & Rice and KKR, the merging of these two companies is expected to open up the potential for expanding Cloudera’s customer base by offering a broader range of enterprise solutions. In addition, the combined company will have the resources to expand quickly into new sectors and geographies while increasing quality and efficiency. As a result, Cloudera’s relationships with its partners are also expected to be strengthened.

The combined organisation will also benefit from cloud-native capabilities merged from KKR’s investments in data analytics software companies Alooma (now part of Snowflake) and StratioCloud. These offerings can enable its customers to take advantage of more efficient and cost effective hardware investment strategies focused on cloud-centric architectures which can scale quickly as user demand requires. In addition, the expanded product portfolio could also include:

• Machine Learning (ML) powered data products.
• Data security tools.
• Analytics solutions.
• NoSQL databases that offer unique capabilities for optimising workloads in hybrid cloud environments.

Overall, this acquisition is expected to provide long-term strategic benefits that will help accelerate Cloudera’s growth in the rapidly expanding enterprise software industry. With access to additional capital resources, cutting edge technology and enhanced reach into new markets they will no doubt be able to strengthen their ability to serve their current customers while continuing to expand their presence worldwide with great success.

Enhancing Cloudera’s product and services

Cloudera’s coming together with Clayton, Dubilier & Rice and KKR will open new possibilities for enhancing their products and services. The combined entity will combine its resources to focus on driving continued customer delight, accelerating customer outcomes and building a platform for future growth.

The two companies have created a differentiated technology-driven platform well positioned to capitalise on the growing enterprise data & analytics market space demand. Cloudera’s product portfolio combines an integrated suite of products; maturing cloud offerings; an expanding list of partners; an open source rental feature philosophy, enabling customers needed commercial flexibility; and differentiated professional services capabilities including deep data science, machine learning and AI capabilities. Cloudera plans to use this influx of capital to continue investing in its products and services while also driving strategic M&A opportunities that are complementary investments or capabilities designed to expand its reach into additional areas such as IoT, big data analytics and enterprise AI/ML.

The result will be a larger organisation that introduces new intangible assets, real estate investments, innovation labs, and various differentiated offerings comprising services focused on vertical industries (including gaming, media, hospitality) that can be extended across all the 68 countries the company operates in. This enhanced portfolio could provide more integrated solutions into existing and new markets besides traditional core markets resulting from digital transformation trends experienced today across industries. Furthermore, access to complementary public cloud infrastructure initiatives would allow for increased scalability rather than requiring more staff size increases for growth in presenting scalability options for customers and second-gen (SaaS) based offerings offering further mass market potential within underserved or underdeveloped markets.

Closing Conditions

Cloudera Inc. (NYSE: CLDR) announced today that it has entered into a definitive agreement with Clayton, Dubilier & Rice and KKR to acquire the company for $5.3 billion in cash.

The transaction is subject to certain closing conditions, including Cloudera shareholders’ approval and regulatory approvals’ satisfaction.

Below is an overview of the closing conditions for the proposed acquisition.

Regulatory approvals

Cloudera’s acquisition by Clayton, Dubilier & Rice and KKR is subject to customary closing conditions, including regulatory approvals. This includes clearance from the US Department of Justice under the Hart Scott Rodino Antitrust Improvements Act (HSR Act) and applicable foreign antitrust authorities.

The companies expect to receive these approvals in due course and hope to close the acquisition in the second or third quarter of 2019.

Shareholder approvals

Cloudera, Inc. has entered into a definitive agreement to be acquired by Clayton, Dubilier & Rice and KKR at a transaction value of $5.3 billion. After closing the transaction, Cloudera’s common stock will no longer be listed on any public securities exchange.

Shareholder approval is one of the necessary closing conditions for this acquisition to be completed as intended. For this condition to be fulfilled, Cloudera’s shareholders must approve the transaction at a special meeting of shareholders currently expected to occur in late 2019 or early 2020. In addition, other customary conditions are also required for the closing, including regulatory approvals and other covenants by both parties set out in the definitive agreement between Cloudera and Clayton, Dubilier & Rice and KKR.

Timeline

On May 15, 2018, Cloudera, a global machine learning and advanced analytics platform provider, entered into a definitive agreement to be acquired by private equity firms Clayton, Dubilier & Rice and KKR for $5.3 billion. The acquisition of Cloudera marks an important milestone in the company’s path toward becoming a leading enterprise data cloud provider.

Let’s take a look at the timeline of the acquisition.

Anticipated closing date in the second half of 2021

Cloudera announced in February 2021 their intention to enter into a definitive agreement with private equity firms Clayton, Dubilier & Rice and KKR involving the acquisition of Cloudera for $5.3 billion. This deal is expected to be completed in the second half of 2021 and follows an impressive set of financial milestones reached by the company in 2020, including 50% year-over-year revenue growth from Q4 2019 to Q4 2020.

Cloudera will operate as an independent business and benefit from increased financial flexibility, enabling it to pursue long-term growth strategies and opportunities within the cloud data platform marketspace. Upon closing, Tom Reilly, current Chief Executive Officer of Cloudera, will continue to lead the company with a handpicked group of senior leaders extracted from existing CDP executives.

The anticipated closing date for this transaction is “the second half of 2021,” though it may require up to 12 months or longer depending on customary regulatory approvals. In addition, further refinements could be required based on some other outstanding considerations such as additional financing arrangements that may also need further evaluation before its completion.