Cloudera stock jumped 17 percent on Wednesday after it announced an all-stock merger of equals with competitor Hortonworks. Hortonworks stock was halted just prior to the announcement. The two companies will hold a conference call to discuss the deal at 5 p.m. Eastern time.
The combined equity value of the two companies is $5.2 billion based on the prices of the companies’ stocks on Tuesday, according to a statement. The deal is subject to U.S. antitrust clearance, and the companies expect it to close in the first quarter of 2019.
“Under the terms of the transaction agreement, Cloudera stockholders will own approximately 60% of the equity of the combined company and Hortonworks stockholders will own approximately 40%,” the statement said. “Hortonworks stockholders will receive 1.305 common shares of Cloudera for each share of Hortonworks stock owned, which is based on the 10-day average exchange ratio of the two companies’ prices through October 1, 2018.”
Cloudera’s CEO, Tom Reilly, will be CEO of the combined company, and Cloudera’s finance chief, Jim Frankola, will be finance chief of the combined company, the statement said. Hortonworks’ CEO, Rob Bearden, will be on the board of the combined company, and Cloudera board member Marty Cole will be chairman of the combined firm’s board. Morgan Stanley is advising Cloudera, and Qatalyst is advising Hortonworks.
Hortonworks went public in 2014, and Cloudera followed in 2017. The two companies commercialize the Hadoop open-source big data software. Intel was a major Cloudera investor. Amazon’s market-leading cloud unit has a distribution of Hadoop software, and another competitor of the companies, MapR, is privately held.
The statement said the combined company will have $720 million in annual revenue, based on the year that ended on June 30, and more than 2,500 customers.
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