Cloudera, acquired as private equity, continues to focus on technology
A person takes a photo 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 City on April 28, 2017.
Michael Neagle | Bloomberg | Getty Images
Cloudera’s deal on Tuesday to sell to a group of buyout companies in a deal worth $ 5.3 billion continues the trend of 2021.
Of the 12 technology acquisitions made in the United States this year, seven were organized by private equity funds, excluding specialist acquisition companies, according to FactSet data.
The most significant is Thomas Bravo’s acquisition of security software provider Proofpoint in April for a $ 12.3 billion deal. In February, Stone Point Capital and Insight Partners agreed to acquire technology-based real estate company CoreLogic for nearly $ 6 billion.
Clayton, Dubilier & Rice and KKR said they are working together to acquire Cloudera so that data analytics companies can migrate to the cloud faster. In addition to announcing the acquisition, Cloudera announced the acquisition of two smaller companies, Cazena and Datacoral, in order to expand its public cloud services.
Buyout companies have become increasingly active in the tech industry in recent years, primarily acquiring companies that have experienced sluggish growth and underperforming the stock market. Commerce is recovering from the early days of the pandemic as more organizations run their businesses and rely on digital tools to stay in touch with their employees.
Ernst & Young said in a report earlier this year that technology will account for 24% of total private equity deals in 2019 and 2020.
Overall, the privatization of Cloudera is just another example of the huge amount of private equity funds looking for a home in the software industry, given the high margins and profiles retention of these companies. Analysts wrote in a report on Tuesday: “We expect strategic and financial mergers and acquisitions to continue to be active in this area over the next few quarters / years.”
The Cloudera share price rose 24% and closed at $ 15.93, just below the purchase price of $ 16. Ahead of Tuesday’s rally, stocks had risen 25% in the past year, catching up with the 45% rise in the Nasdaq Composite.
Cloudera has struggled as a public company since its IPO in 2017. 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 transaction of $ 3 billion.
The cloud database and analytics market is intensifying competition from infrastructure providers such as Amazon, Microsoft and Google and start-ups such as Snowflake and Databricks.
Prior to the acquisition of Proofpoint, the company’s stock price had risen 9% in the past 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.
Other major high-tech private equity funds this year are the acquisition of Perspecta by Veritas Capital, which serves the government for $ 7.1 billion, and McAfee’s $ 4 billion corporate operations at a consortium led by Symphony Technology Group. There was a sale of.
Private equity deals represent more than half of the biggest tech acquisitions this year, but the two biggest acquisitions are strategic: Microsoft will acquire voice recognition company Nuance Communications for $ 16 billion in April. Accepted from. And in January, UnitedHealth Group’s Optam announced it would buy healthcare company Change Healthcare for nearly $ 13 billion.
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