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Why Cloudera Stock Soared Today

By Joe Tenebruso - Jun 1, 2021 at 5:35PM

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The cloud data company is being taken private.

What happened

Shares of Cloudera (CLDR) surged 24% on Tuesday after the data analytics provider said it reached a deal to be acquired for $5.3 billion.  

So what

Private equity firms KKR (KKR 7.25%) and Clayton, Dubilier & Rice agreed to purchase Cloudera for $16 per share, a 24% premium to the stock's closing price on Friday. The all-cash transaction is expected to be completed in the second half of 2021, though it does include a 30-day "go-shop" period, during which Cloudera can solicit competing bids.

Two people are shaking hands.

Image source: Getty Images.

The deal would allow Cloudera to accelerate its transition toward public cloud services outside of the view of the public market. "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," Cloudera CEO Rob Bearden said in a press release.

Now what 

Cloudera has faced intensifying competition from the likes of Amazon Web Services and Microsoft's Azure in recent years. Its stock price, in turn, has languished since its initial public offering (IPO) in April 2017. 

Cloudera's gains on Tuesday finally drove its shares back above its $15 IPO price. "This transaction provides substantial and certain value to our shareholders while also accelerating Cloudera's long-term path to hybrid cloud leadership," Bearden said.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso owns shares of Amazon and has the following options: long January 2023 $2,400 calls on Amazon. The Motley Fool owns shares of and recommends Amazon and Microsoft. The Motley Fool recommends KKR and recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.

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