Competitors Cloudera and Hortonworks Announce USD 5.2 Billion Merger

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Cloudera, Inc. (NYSE :CLDR) and Hortonworks, Inc. (NASDAQ: HDP) jointly announced that they have engaged in an agreement where both companies will combine in an all-stock merger of equals. Hortonworks and Cloudera have both competed in the Hadoop big data software market and have been public for that past few years. Considering the closing prices of their stocks on Tuesday, their combined equity value is roughly USD 5.2 Billion. The deal is expected to close in the first quarter of 2019.

Following the announcement of the all-stock merger, Cloudera’s stock grew 25%, while Hortonworks stocks jumped 29 %. Both stocks opened 15 % higher on Thursday. The merger is expected to generate significant financial benefits and improve the margin profile. Yearly Revenue is estimated to be USD 750 Million, with USD 500 Million in cash and no debt. Combined, the companies will have 2,500 customers, and more than USD 125 Million in annual cost synergies. Cloudera stock holders will hold 60 % of the combined company, and Cloudera CEO Tom Reilly aims to individually run both, while Hortonworks CEO Rob Bearden will join the board of directors.  

The transaction is aspiring to create the next generation data platform leader, distributing an expansive scale and resources to deliver the industry’s first enterprise data cloud. The union of both companies cements the industry standard for hybrid cloud data management, accelerating customer adoption, community development and partner engagement. When commenting on the merger, CEO Tom Reilly stated, “together, our highly complementary companies will create an industry standard leader for modern data management.”

Cloudera and Hortonworks both provide data analysis products based on Hadoop, yet Hortonworks invested heavily in capabilities for Internet of Things applications while Cloudera had focused on machine-learning application. With the all-stock merger it is believed the union of both companies gives customers a much broader approach to the changing nature of data generation and analysis.

2 Comments
  1. Mario Chaudry 2 weeks ago
    Reply

    My $CLDR short worked out nicely from last night. 😉 Covered at 20.55-20.52 for a quick 1$ swing.

  2. Andrew N. 2 weeks ago
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    I waited for $HDP to establish below the 9sma/vwap/90sma and went short with the 200sma as first target.Didn’t get follow through after that. #greenisgood #growyoursmallaccount

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