The $5.3 billion acquisition of cloud-analytics specialist Cloudera could mark a tech watershed moment for private equity firm Clayton, Dubilier & Rice.
CD&R and KKR said they would pay $16 a share to take the Santa Clara, Calif.-based company private in a 50-50 deal. Among PE-led buyouts of tech companies, the deal marks this year's second-largest deal after Thoma Bravo's $10.2 billion acquisition of real-estate platform RealPage in April, according to PitchBook data.
When it comes to the biggest private equity firms, KKR has a much deeper history in tech alongside firms such as Silver Lake and Thoma Bravo as major firms in the asset class have increasingly placed big bets on software, hardware and a host of other IT-focused sectors. By contrast New York-based CD&R has dabbled across a range of industries, but is not well known as a tech investor.
In May, CD&R agreed to pay £2.6 billion (around $3.7 billion) for UDG Healthcare, an Irish provider of global health services. In February, the firm purchased Wolseley UK, a distributor of plumbing and building materials for £308 million.
CD&R isn't totally new to tech, however. The firm acquired Epicor Software for $4.7 billion from KKR last October. More recently, it purchased sales optimization software developer KBMax in May.
Jeff Hawn, the firm's operating partner who is in line to become chairman of Cloudera, previously served as CEO of software companies Quest Software, Vertafore and Attachmate.
Cloudera's stock had a rocky run since its NYSE debut in 2017. The shares have generally traded under their IPO price, other than when they reached an all-time high of $22.87 later that year.
Shares plummeted to $5.10 in 2019, leading to activist investor Carl Icahn building a major position in the company. Icahn has voted his 18% stake in favor of the buyout, Cloudera said Tuesday.
CD&R and KKR's joint Cloudera deal is expected to close in the second half of 2021. CD&R declined to comment beyond their written statement announcing the transaction.
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