Cloudera gets $2.14bn debt package to help take company private

Aug 11, 2021 | News, UKPEC

Cloudera’s roughly $5.3bn deal to go private and join the booming private-equity world just got a boost from the debt market.

The Silicon Valley company completed a $2.14bn loan financing on Tuesday, as part of a bid by private-equity firms KKR and Clayton Dubilier & Rice LLC to take the software company private, according to a source with direct knowledge of the dealings.

 Pricing on the seven-year, $1.64bn first-lien loan came roughly as expected, at Libor plus 375 basis points.

A smaller, eight-year, $500m second-lien loan priced at Libor plus 600 basis points, after circulating with investors in a range of 625-650 basis points above the risk-free benchmark, indicating robust demand for the riskier slice of debt.

Credit rating firm S&P Global said in late July that the sponsors were expected to fund the deal with about $2.77bn of equity, a $250m undrawn revolver and the $2.14bn loan package.

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Under terms of the deal struck in June, Cloudera stockholders will receive $16 a share in cash, or a 24% premium to the closing price of the stock on May 28, 2021.

Cloudera shares closed 0.1% lower at $15.86 on Tuesday, but were up 14% on the year to date, according to FactSet data. That compares with an 18.1% gain for the S&P 500 index over the same stretch and a 15.2% gain for the Dow Jones Industrial Average.

Rob Bearden, Cloudera’s chief executive, said in June that the private-equity deal will help give the company resources and flexibility to “drive product-led growth” and expand its market opportunity.

The transaction comes on the heels of a red-hot period for corporate matchups, with the volume of global mergers and acquisitions hitting a record of about $2.5 trillion in the first five months of the year, when looking at announced and completed deals, or an 178% increase from a year before, according to Wells Fargo Investment Institute and Dealogic data.

The Cloudera deal is expected to close in the second half of 2021.

Source: Market Watch

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