UPDATED 16:05 EDT / JUNE 09 2020

BIG DATA

Cloudera reportedly exploring a sale after interest from potential buyers

Data management and analytics heavyweight Cloudera Inc. is looking at potentially selling itself, Bloomberg reported today.

Sources familiar with the matter told the publication that publicly traded Cloudera has held talks with multiple potential buyers including private equity firms this year. The company is also said to have hired a financial adviser to help weigh its options. However, the tipsters stressed that a deal may not end up happening.

Despite the shortage of details, notably the acquisition price Cloudera might be seeking, the news was still enough to lift its stock more than 22% at one point today. Trading of the company’s shares was temporarily paused on the New York Stock Exchange. Cloudera closed up 18.6% today, to $12 per share, which represents a market capitalization of about $3.6 billion.

Cloudera is the last remaining company from among the three major Hadoop distributors that emerged around the turn of the last decade. It absorbed Hortonworks, another leading Hadoop distributor, in 2018, while the assets of mutual rival MapR were scooped up by Hewlett Packard Enterprise Corp. last August. Cloudera over the years has expanded its focus beyond Hadoop and now sells the Cloudera Data Platform, which provides a broad feature set for managing data, analyzing it and running machine learning models.

That the company is considering an acquisition doesn’t come as a complete surprise. At the start of the year, Cloudera named former Hortonworks boss Rob Bearden (pictured) chief executive officer, which was interpreted as a sign that a sale may be on the table. 

“Bearden led two companies — Jboss and SpringSource — to high-profile acquisitions,” Charles King of Pund-IT Inc. told SiliconANGLE at the time. “If the market for third-party Hadoop solutions fails to develop as robustly as Cloudera’s board and investors hope, they could ask Bearden to lead the company to a similarly successful end.”

Investors sent Cloudera’s shares tumbling more than 11% at one point last week after the company posted weaker-than-expected guidance in its first-quarter earnings report. The company generated more profit and revenue than Wall Street had anticipated during the three-month period. However, its full-year revenue guidance of $825 million to $845 million missed Refinitiv’s $858.4 million consensus expectation.

Investor pressure may have also contributed to Cloudera’s reported decision to engage potential buyers. Last year, activist hedge fund manager Carl Icahn took an ownership and appointed two directors to its boards. Analysts at BTIG LLC interpreted the move at the time as a potential sign Icahn may be looking to push for a sale.

Cloudera’s recent changes to its cost structure following the merger with Hortonworks may have helped make it a more attractive acquisition target.

“We have basically created the cost structure that will support profitable revenue growth,” Chief Financial Officer Jim Frankola said during the first-quarter earnings call. If the company achieves revenue and bookings growth “in excess of our assumptions,” the executive explained in response to an analyst question, “we will have to increase costs, but we’ll be able to increase costs at a much lower rate than bookings or revenue.”

Photo: SiliconANGLE

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