Elliott and Vista Equity are taking Citrix private in a $16.5 billion deal

Jan 31 (Reuters) – Software company Citrix Systems (CTXS.O) said Monday it would be privatized for $16.5 billion, including debt from subsidiaries of Elliott Management and Vista Equity Partners, which are trying to to take advantage of the pandemic-driven cloud boom Computing.

The company said its shareholders would get $104 per share, implying an equity value of nearly $13 billion, confirming a Reuters report Sunday on the joint offering. Continue reading

The deal, which is expected to close by mid-2022, will combine Citrix with Vista’s data analytics company TIBCO Software. Vista will own approximately 65% ​​of the combined company upon closing, sources familiar with the matter said.

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Elliott and Vista believe that the public market has not fully recognized Citrix’s annual recurring revenue growth and the combination of the two enterprise software players allows them to cross-sell products to a highly overlapping customer base of 400,000 enterprise customers in 100 countries.

The deal represents a 24.3% premium to Citrix’s Dec. 20 close, when a deal was first discussed, but is lower than Friday’s close.

“Today’s announcement is the culmination of a strategic review process that has been conducted over five months,” said Bob Calderoni, Citrix interim CEO, in a statement.

Based in Fort Lauderdale, Florida, Citrix has only in recent years focused more on cloud computing, offering remote work solutions and enterprise networking software.

Elliott’s Jesse Cohn joined the company’s board in 2015 as hedge fund pressured Citrix to spin off some units and buy back shares before stepping down in 2020.

However, Citrix’s failure to capitalize on the rise of virtual working during the COVID-19 pandemic caused its shares to plummet 23% over the past year.

“In the midst of a significant business model transformation, privatization is often the best opportunity to grow,” said Daniel Newman, analyst at Futurum Research.

Private equity players have recently increased their stakes in the cloud-based software space. The deal also signals a strong market for leveraged buyouts, as Elliott and Vista have secured $15 billion in committed financing from a syndicate of banks.

Newman compared the deal with Citrix to KKR & Co (KKR.N) and Clayton Dubilier & Rice, which privatized Cloudera for $4.7 billion last year as the company struggled to make money and grow.

Citrix shares fell 3.4% to $101.94 on Monday.

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Reporting by Chavi Mehta in Bengaluru and Krystal Hu in New York, with additional reporting by Akash Sriram and Eva Mathews; Editing by Ramakrishnan M. and Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

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