Reports say a private equity firm is in the hunt; speculation swirls over a possible IBM takeover
Cloud data management and analytics specialist Cloudera is reportedly on the market for acquisition. Leading reports indicate an unnamed private equity firm could take the company private. Analysts speculate that a major tech company, with IBM in the lead among mentions, could take over the company.
The Lowdown: Cloudera’s stock surged nearly 19% on Tuesday after reports circulated that a private equity firm was looking to acquire the company. The report led to a stream of analyst speculation that IBM — which partners with Cloudera — could be the ultimate buyer of the cloud service company.
The Details: Fueling speculation that Cloudera is on the market for a buyer is several factors. Cloudera’s market valuation is low relative to the rest of the market and its potential. The company is currently valued around $4 billion, beneath the valuation of $5.2 billion it received after merging with Hortonworks. IBM is at the front of the line of potential vendor acquirers largely because of the existing partnership between the two companies and the natural fit of Cloudera with IBM’s Red Hat acquisition. Cloudera CEO Rob Bearden also has a track record for M&A exits.
Background: Cloudera, which recently launched a new enablement program to help partners train on cloud data management and development, recently issued an amended 2020 forecast below its original sales outlook. The company entered 2020 with a strong first quarter, but has since lowered its expectations given the sluggish economy dragged down by the COVID-19 pandemic.