Cloudera is reportedly exploring a sale -- and IBM could wind up the buyer, according to an analyst.
Shares of Cloudera (CLDR) - Get Report shot up 18% on Tuesday to $12 after Bloomberg reported that the enterprise software firm is fielding takeover bids, although no deal has yet been reached. Trading was briefly halted in the stock after the news was reported.
D.A. Davidson analyst Rishi Jaluria wrote on Tuesday that IBM (IBM) - Get Report "is the most likely strategic buyer, especially given the partnership between Cloudera and IBM." The two firms teamed up starting last year on data and AI programs within Apache Hadoop.
Cloudera could serve as a complement to IBM's hybrid cloud efforts and to Red Hat, Jaluria wrote. IBM acquired Red Hat, a maker of open source software, for $34 billion last year.
There's an "outside shot" of a Cloudera acquisition by AWS, Google Cloud or Microsoft Azure, Jaluria added; a private equity buyer is also possibility, given Cloudera's recent stumbles.
Cloudera, which sells cloud services for data management and analysis, recently topped revenue and earnings estimates for Q1 but issued a lukewarm sales outlook for both the current quarter and the full fiscal year.
For its fiscal year, which ends January 2021, Cloudera guided for revenue of $825 million to $845 million, lower than its original full-year forecast of between $860 million to $880 million. Analysts polled by FactSet were modeling sales of $862.3 million on average.
Activist investor Carl Icahn and affiliates built an 18% stake in Cloudera last year, fueling speculation that Icahn might eventually push for a sale or some other type of strategic restructuring.
Jaluria also noted Cloudera CEO Rob Bearden's history of M&A exits.
Bearden formerly led Hortonworks, a competitor to Cloudera prior to the two firms' merger in 2019. He also previously served in high-level management roles at two software firms that were acquired.
Cloudera shares are up 4% year to date.