Cloudera Inc (NYSE: CLDR) is having an incredibly strong start to the trading session in the pre-market hours this morning, and for good reason. The company announced that it has entered into a definitive merger agreement, exciting investors and sending the stock screaming for the top. Today, we’ll talk about:
- The merger;
- what we’re seeing from CLDR as a result; and
- what we’ll be watching for with regard to the stock ahead.
CLDR Announces Merger
As mentioned above, Cloudera is having an incredibly strong start to the trading session this morning after announcing merger news. In a press release issued after-hours yesterday, the company announced that it has entered into a definitive merger agreement with Hortonworks. Through the merger, the two companies plan on creating the world’s leading next generation data platform provider.
According to the terms of the agreement, once the transaction is complete, CLDR shareholders will own about 60% of the combined company with Hortonworks shareholders owning about 40%. Hortonworks stockholders will receive 1.305 common shares of CLRD for each share of Hortonworks owned.
In a statement, Tom Reilly, CEO at CLDR, had the following to offer:
Our businesses are highly complementary and strategic. By bringing together Hortonworks’ investments in end-to-end data management with Cloudera’s investments in data warehousing and machine learning, we will deliver the industry’s first enterprise data cloud from the Edge to AI. This vision will enable our companies to advance our shared commitment to customer success in their pursuit of digital transformation.
The above statement was followed up by Rob Bearden, CEO at Hortonworks. Here’s what he had to offer:
This compelling merger will create value for our respective stockholders and allow customers, partners, employees and the open source community to benefit from the enhanced offerings, larger scale and improved cost competitiveness inherent in this combination… Together, we are well positioned to continue growing and competing in the streaming and IoT, data management, data warehousing, machine learning/AI and hybrid cloud markets. Importantly, we will be able to offer a broader set of offerings that will enable our customers to capitalize on the value of their data.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Cloudera, the news proved to be overwhelmingly positive. After all, this merger will immediately add value for shareholders on both sides of the equation. So, it comes as no surprise to see that excited investors are sending the stock on a run for the top. As is almost always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:30), CLDR is trading at $21.00 per share after a gain of $3.92 per share or 22.95% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CLDR. In particular, we’re interested in following the story surrounding the merger. Sure, the agreement is a definitive one. However, the deal is still subject to customary closing conditions and regulatory approval. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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