By Miriam Gottfried and Cara Lombardo
Private-equity firms KKR & Co. and Clayton Dubilier & Rice LLC are nearing a deal to buy Cloudera Inc. and take the software company private, according to people familiar with the matter.
A deal for the data-cloud company could be finalized by Tuesday, assuming the talks don't fall apart at the last minute, the people said. The exact terms couldn't be learned, but the company has a market value of nearly $4 billion.
Founded in 2008 by a group of engineers from Alphabet Inc.'s Google, Facebook Inc., Oracle Corp. and Yahoo Inc., Cloudera was an early player in the open-source software framework Hadoop, which enables large amounts of data to be processed quickly. But it struggled to shift to the now-dominant public cloud, where it faces steep competition from much larger firms including Amazon.com Inc.'s Amazon Web Services.
Cloudera's shares have had a rocky run since their public-market debut in 2017. They are trading below their initial public offering price and are down roughly 8% so far this year after closing Friday at $12.86.
Still, recent results have shown improvement in the company's business. Cloudera in March reported revenue of $869 million for its fiscal year ended Jan. 31, an increase of 9%, and an operating margin of 17% compared with a negative one a year earlier. It is scheduled to report first-quarter results this week.
Activist investor Carl Icahn owns roughly 18% of the company and in 2019 received two board seats as part of a settlement. The company also tapped Robert Bearden as chief executive to replace Tom Reilly, who stepped down. Mr. Bearden was already a Cloudera director and is co-founder of Hortonworks Inc., an open-source company Cloudera bought in 2019.
Private-equity firms including KKR and CD&R have been increasingly snapping up software companies, attracted by their predictable and growing cash flows. Last summer, KKR sold Epicor Software Corp. to a group led by CD&R for about $4.7 billion including debt.
(END) Dow Jones Newswires