Cloudera stock was flying high Thursday on news of a deal with Hortonworks (NASDAQ:HDP).
The deal between Cloudera (NYSE:CLDR) and Hortonworks will have the two cloud computing companies combining to become a single company. To achieve this goal, the two companies are planning to go through with a all-stock merger.
The all-stock merger deal between Cloudera and Hortonworks will have holders of HDP stock exchanging them for shares of CLDR stock. This will have Hortonworks stockholders receiving 1.305 common shares of Cloudera stock for each share of HDP stock that they own.
If all goes well and the deal reaches completion, holders of Cloudera stock will control 60% of the new company. The remaining 40% will belong to former shareholders of Hortonworks stock.
Once the deal is complete, Cloudera and Hortonworks will have various executives from both companies serving as leaders in the new company. Cloudera CEO Tom Reilly will serve as CEO of the new company. The new Board of Directors will also be made up of four previous Hortinworks directors and five Cloudera directors. An additional director will also be chosen by the new Board.
Cloudera and Hortonworks note that the deal already has the unanimous approval of both of their Board of Directors. However, it will still need to complete other customary closing conditions. This includes approval from regulators and shareholders of Hortonworks and Cloudera stock.
Cloudera and Hortonworks are expecting the deal to close during the first quarter of 2019.
CLDR stock was up 11% and HDP stock was also up 11% as of Thursday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.
