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Home / Business / Cloudera, Hortonworks Stocks Rise as the two rivals come together

Cloudera, Hortonworks Stocks Rise as the two rivals come together



Do you remember Big Data? The once-inevitable buzzword has become another area of ​​the enterprise software industry that is already showing signs of maturing. An example of this is the $ 5.2 billion merger of Cloudera and Hortonworks.

The announcement of the merger brought the shares of both companies to life. Cloudera shares rose 26% after Hortonworks rose 27%.

Both companies were pioneers in Hadoop, an open-source platform that could easily analyze data – a necessity during a time when data availability increased exponentially each year. Cloudera and Hortonworks were among the startups that focused on Hadoop, which went public early on as the flow of IPOs slowed.

But as both companies 'revenues increased, Cloudera's 1

,300 customers generated $ 411 million last year, while Hortonworks' $ 1,400 customers earned $ 309 million – losses were both large.

Hortonworks debuted in December 2014 with an offer price of $ 16, while Cloudera went public with $ 15 per share in April 2017. Equities underwent initial rallies that were typical of tech IPOs as the underwriter's trading desks ensure a smooth start. But both underperformed in 2018. On Wednesday, Horton closed 4% this year and Cloudera 2%, compared to a 15% rise in the Nasdaq Composite Index.

At a conference call to discuss the merger, Cloudera CFO Jim Frankola said the merged entity would save $ 125 million in annual costs by the end of 2020 and generate more than $ 1 billion in revenue. In addition, the combined companies are better positioned to serve their existing customers in the competition for a larger company Share in their market

Cloudera shareholders will own around 60% of the merged entity, while Hortonworks will own 40%. The total value of the company at the close on Tuesday is $ 5.2 billion, it said.


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