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Cloudera and Hortonworks, the two leading enterprise Hadoop providers, said they will combine in a merger of equals in a deal valued at $5.2 billion.
Under the terms of the deal, Cloudera shareholders will own 60 percent of the combined company with Hortonworks stockholders taking 40 percent. Hortonworks shareholders will get 1.305 Cloudera shares for each share owned.
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According to the companies, the combined entity has a better chance to be a next-gen data platform across multiple clouds, on-premises and Edge computing. Hortonworks and Cloudera also have complementary approaches, customers and industries.
Indeed, the combined company will have about $720 million in revenue, more than 2,500 customers and about $500 million in cash.
The plan for the companies is to expand their market and leverage a unified platform for edge computing to AI as well as Internet of things.
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Overall, the companies are complementary across multiple areas. Both Hortonworks and Cloudera have multiple opportunities to cross sell and optimize costs. The companies noted that they have a common code based, can leverage open source and have a broader international footprint.
Tom Reilly, CEO of Cloudera, said "bringing together Hortonworks' investments in end-to-end data management with Cloudera's investments in data warehousing and machine learning" will enable more digital transformation for customers.
Meanwhile, Rob Bearden, CEO of Hortonworks, said the scale will help the company invest more to "continue growing and competing in the streaming and IoT, data management, data warehousing, machine learning/AI and hybrid cloud markets."
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Reilly, will serve as CEO of the combined company. Hortonworks' Chief Operating Officer, Scott Davidson, will serve as Chief Operating Officer; Hortonworks' Chief Product Officer, Arun C. Murthy, will serve as Chief Product Officer; and Cloudera's Chief Financial Officer, Jim Frankola, will serve as Chief Financial Officer, of the combined company. Bearden, will join the board of directors. Current Cloudera board member, Marty Cole, will become Chairman of the board of directors.
As for the outlook, the companies said the combined entity should be on track for $1 billion in annual revenue by 2020.
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