Cloudera’s Tom Reilly will continue to serve as chief executive in the combined company. Photo: Michael Nagle/Bloomberg News
Cloudera Inc. CLDR 1.07% and Hortonworks Inc. HDP 1.77% have agreed to combine in an all-stock deal that the firms say will help increase their scale in providing software to enterprise clients.
The firms expect to generate about $720 million in combined annual revenue and achieve more than $125 million in annual cost savings as a result of the merger.
Under terms of the deal, Cloudera stockholders will own about 60% of the combined company and Hortonworks stockholders the remaining 40%, the companies said Wednesday.
Each Hortonworks share will be good for 1.305 common shares of Cloudera, providing a 1.9% premium to Hortonworks’ closing price Wednesday of $21.88.
In after-hours trading, Cloudera shares rose more than 16% to $19.90, while Hortonworks rose by a comparable margin to $25.40.
Hortonworks Chief Executive Rob Bearden said in prepared remarks that the combined company can continue to grow and compete in the markets for content streaming, Internet of Things, data management, data warehousing, artificial intelligence and hybrid cloud computing.
Cloudera CEO Tom Reilly and Cloudera finance chief Jim Frankola will retain their existing roles in the combined company, as will Hortonworks’ chief operating officer, Scott Davidson, and Hortonworks’ chief product officer, Arun C. Murthy.
Cloudera’s current board will provide five of the initial nine directors of the newly formed company’s board, while four directors will come from Hortonworks’ board. The combined board will select a 10th director.
The transaction is expect to close during the first quarter of 2019.
—Josh Beckerman contributed to this article.
Write to Aisha Al-Muslim at [email protected]