Cloudera, Largely Controlled By Carl Icahn, Reportedly Considers Sale

The cloud data management company has seen wild ups and downs since going public in 2017. Now it is in talks with potential suitors, including private equity firms, according to Bloomberg Law.

Cloudera shares jumped Tuesday on a report from Bloomberg Law that the big data company, formed by the merger of the two leading Hadoop vendors and largely controlled by Carl Icahn, is exploring a sale.

The Palo Alto, Calif.-based cloud software vendor, which gave Icahn two board seats last August, has received interest from potential buyers, including private equity firms, and it is working with a financial advisor as it considers those offers, Bloomberg reported.

Cloudera stock, which closed Monday at $10.11, quickly shot above $12 a share Tuesday on news of M&A negotiations. Cloudera told CRN: “We don't comment on rumors and speculation.”

[Related: Cloudera Revamps Channel Program, Incorporates Former Hortonworks Partners]

Last August, Icahn took two seats on the company’s board weeks after disclosing accumulation of 50.3 million shares that bestowed him with 18.36 percent of the company.

Under Icahn’s agreement with Cloudera, Icahn Enterprises employees Nicholas Graziano and Jesse A. Lynn took seats on a board that expanded to 10 members, and Icahn pledged to limit his ownership to 20 percent and not nominate more directors at a 2020 stockholder meeting.

As the industry's leading enterprise Hadoop vendor, Cloudera was a hot IPO in April of 2017—it hit the public market with a $1.9 billion valuation and continued to surge into the summer on the New York Stock Exchange.

That success prompted a $5.2 billion merger with Hortonworks, its largest competitor.

But rationalizing and streamlining the two product lines proved challenging. At the same time, data scientists started moving away from Cloudera’s core product, the open source Hadoop big data framework.

The stock plummeted in June of 2019 as CEO Tom Reilly announced his retirement. Martin Cole, a former Accenture exec, was chosen to fill the void in leadership.

That rocky stretch created the opportunity seized by the famed activist investor.

Soon after Icahn’s revealed he was the company’s largest shareholder, a 2020 first-quarter earnings statement described revenue falling short of Wall Street’s projections, contributing to a $103.1 million loss—double the loss from the same period of the previous year.

But that was the company’s nadir. Cloudera recovered by moving beyond Hadoop—positioning itself over the last year as a cloud data company enabling advanced analytics, edge processing, and machine learning workloads.

As part of that effort, Cloudera revamped its platform with new components packaged together as the Cloudera Data Platform. Among the innovations was replacing Hadoop with an object store that could run in Kubernetes clusters.

A profitable third-quarter satiated Wall Street, and Cloudera stock has been steadily recovering since the abysmal summer that saw Reilly's departure.

Last January, former Hortonworks CEO Rob Bearden, coming off a gig leading Docker through the sale of its enterprise business, took the helm of Cloudera as its new CEO.