A person taking a picture of a Cloudera sign on an Apple iPhone during an initial public offering (IPO) of the company on the New York Stock Exchange (NYSE) in New York on April 28, 2017.
Michael Neagle | Bloomberg | Getty Images
Cloudera’s agreement on Tuesday to sell to a group of buyout companies in a $ 5.3 billion worth of deal continues the trend of 2021.
Of the 12 tech acquisitions made in the United States this year, seven were organized by private-equity funds, excluding special-purpose acquisition companies, according to FactSet data.
The biggest is Thomas Bravo’s acquisition of security software vendor Proofpoint in April for a $ 12.3 billion deal. In February, Stone Point Capital and Insight Partners agreed to acquire technology-powered real estate company CoreLogic for nearly $ 6 billion.
Clayton, Dubilier & Rice and KKR said they are working together to acquire Cloudera so data analytics companies can move to the cloud faster. In addition to announcing the acquisition, Cloudera announced that it will acquire two smaller companies, Cazena and Datacoral, to expand its public cloud services.
Buyout companies have become more and more active in the technology sector in recent years, primarily acquiring companies that have experienced slowing growth and underperforming the stock market. Trading is recovering from the early days of the pandemic as more organizations run their businesses and rely on digital tools to stay connected to their employees.
Ernst & Young said in a report earlier this year that technology will account for 24% of total private equity transactions in 2019 and 2020.
“Overall, Cloudera’s privatization is just another example of the huge amount of private-equity fund looking for a home in the software sector, given the high margins and retention profiles of these companies.” Analysts wrote in a report on Tuesday: “We expect strategic and financial M & A to continue to be active in this area over the next few quarters / years.”
Cloudera’s share price rose 24% and closed at $ 15.93, just below the $ 16 acquisition price. Prior to Tuesday’s rally, stocks had risen 25% over the past year, catching up with the Nasdaq Composite’s 45% rise.
Cloudera has been struggling as a public company since its IPO in 2017. Together with Hortonworks, we entered the market as a leader in commercializing an open source analytical technology called Hadoop. Cloudera and Hortonworks merged in early 2019, resulting in a final $ 3 billion transaction.
The cloud database and analytics market is intensifying competition from both infrastructure vendors such as Amazon, Microsoft and Google and start-ups such as Snowflake and Databricks.
Prior to the acquisition of Proofpoint, the company’s share price had risen 9% in the last 12 months, while the Nasdaq had risen 62%. Proofpoint’s revenue growth slowed from 24% in 2019 to 18% in 2020 and 39% the year before.
Leading other high-tech private-equity funds this year are Veritas Capital’s acquisition of Perspecta, which serves the government for $ 7.1 billion, and McAfee’s $ 4 billion enterprise business to a consortium led by the Symphony Technology Group. There was a sale of.
Private-equity transactions account for more than half of this year’s largest tech acquisitions, but the two largest acquisitions are strategic: Microsoft will acquire voice-recognition company Nuance Communications for $ 16 billion in April. Agreed to. And in January, UnitedHealth Group’s Optam announced that it would buy healthcare company Change Healthcare for nearly $ 13 billion.
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Cloudera, acquired as private-equity money, continues to focus on technology
Source link Cloudera, acquired as private-equity money, continues to focus on technology