Cloudera and Hortonworks merge to advance hybrid cloud development, Edge and Artificial Intelligence

Cloudera and Hortonworks have announced a corporate partnership to jointly become a data platform provider, spanning multi-cloud, on-premises and the Edge. They will also accelerate innovation in IoT, streaming, data warehouse, and Artificial Intelligence.

This merger will also expand market opportunities for Hortonworks DataFlow and Cloudera Data Science Workbench along with partnerships with public cloud vendors and systems integrators.

Tom Reilly, chief executive officer at Cloudera, called their merger as highly complementary and strategic. He said, “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.”

Rob Bearden, chief executive officer of Hortonworks agrees saying that, “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.”

The terms of the transaction agreement are:

• Cloudera stockholders will own approximately 60% of the equity of the combined company.
• Hortonworks stockholders will own approximately 40% of the equity of the combined company.
• 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.
• The companies have a combined fully-diluted equity value of $5.2 billion based on closing prices on October 2, 2018.

This merger is expected to generate significant financial benefits and improved margin profile for both the companies which includes:

• Approximately $720 million in revenue
• More than 2,500 customers
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• More than 800 customers over $100,000 ARR
• More than 120 customers over $1 million ARR
• More than $125 million in annual cost synergies
• More than $150 million cash flow in CY20
• Over $500 million cash, no debt

Read more about the announcement on the Hortonworks blog.

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