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Aug. 10, 2021, 6:16 p.m. EDT

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

By Joy Wiltermuth

Cloudera Inc.’s roughly $5.3 billion 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 $2.14 billion loan financing on Tuesday, as part of a bid by private-equity firms KKR & Co. 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, $1.64 billion first-lien loan came roughly as expected, at Libor plus 375 basis points.

A smaller, eight-year, $500 million 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 $2.77 billion of equity, a $250 million undrawn revolver and the $2.14 billion loan package.

Clayton Dubilier & Rice declined to comment, while KKR (NYS:KKR) and Cloudera didn’t immediately respond.

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 (S&P:SPX) over the same stretch and a 15.2% gain for the Dow Jones Industrial Average (DOW:DJIA) .

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.

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