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Private equity money keeps pouring into tech, as Cloudera becomes latest multibillion-dollar buyout

Cloudera’s agreement on Tuesday to sell to a group of buyout firms (Clayton Dubilier & Rice LLC (CD&R) and KKR & Co) in a transaction valued at $5.3 billion continues a 2021 trend: most of the big-dollar deals in tech are going to private equity. Buyout firms have been increasingly active in tech in recent years, primarily snapping up companies that have experienced slowing growth and stock market underperformance. Ernst & Young said in a report early this year that technology accounted for 24% of private equity deals by total value in 2020, up from 19% in 2019.

“Overall, the take private of Cloudera is just another example of the tremendous amount of private equity money looking for a home in the software sector given the strong margin and retention profile of these companies,” analysts at Stifel wrote in a report Tuesday. “We expect M&A, both strategic and financial, to remain active in the space in the coming quarters/years.” Read more here

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