MapR Says It’s Close to Deal to Sell Company
MapR, which recently warned that it may have to lay off more than 120 people after funding fell through following an unexpectedly poor first quarter, has signed a letter of intent to sell the company. The potential inquirer is now doing its due diligence, according to a letter MapR filed with Santa Clara County, California.
“The company is continuing to pursue a strategic transaction that if successful may allow it to avoid the Santa Clara Closing,” MapR Technologies Vice President of Human resources Cindy Arthur wrote in a WARN letter last week. “In connection with these efforts, MapR signed a letter of intent with a potential acquirer and the acquirer is currently in the due diligence of the company’s business.”
MapR’s business has been on the brink since at least May 13, when CEO John Schroeder wrote a letter to local authorities letting them know about the potential need to lay off 122 employees at the company’s Santa Clara headquarters. The company stated that if it didn’t complete a deal by June 14, that it may have to lay off the employees at the Santa Clara site (it had about 450 employees globally at one point).
In her letter, Arthur wrote that the company is postponing its closure. If a deal isn’t signed between June 19 and July 3, it may be forced to commence the layoffs, she writes in the letter.
Even as the company faces the prospect of laying off all of its employees in Santa Clara — which would effectively end all operations — MapR officials have been continuing to work to find a solution that keeps the company operating.
“MapR continues to work diligently on a strategic transaction for continued operations,” the company told Datanami in a written statement. “These discussions are progressing. As required by Federal and California law, we notified our employees that we are extending the WARN notice period to provide more time for these to reach a conclusion.”
It is unknown who MapR’s potential suitor is. The software company, which has attracted $280 million in venture capital, has a number of customers in the high technology field. That includes Google, which led a $110 million investment in MapR back in 2014. Qualcomm Ventures has also invested in the firm, and several other high-tech firms have spent millions on MapR software.
“To be clear, MapR continues its operations at this time,” MapR stated. “We are continuing to engage customers in new opportunities and supporting existing customers and partners globally, and expect to have more news on these developments shortly.”
A week after MapR’s struggles become public, its primary competitor in the Hadoop market, Cloudera, revealed its own struggles and the departure of CEO Tom Reilly. Cloudera had a bad first quarter as customers held off investing in existing Hadoop product suites in anticipation of the company’s new converged product suite, which is expected to ship later this year. The company, which is publicly traded, also lowered its revenue expectations for the reminder of the year.
Cloudera merged with Hortonworks earlier this year and is still in the process of rationalizing which components will go forward in the converged product and which components will be killed off.