Citrix Sold for $16.5 Billion

Citrix (Nasdaq: CTXS) will be sold to investment firms Vista Equity Partners and Evergreen Coast Capital Corp. (an affiliate of Elliott Management) for $16.5 billion in an all-cash deal that will see Citrix taken private and combined with TIBCO Software, which is owned by Vista.

“Over the past three decades, Citrix has established itself as the clear leader in secure hybrid work,” said Bob Calderoni, Citrix board chair and interim CEO, in a statement. “By combining with TIBCO, we will expand this platform and the outcomes our customers achieve.”

Citrix Plus TIBCO

Citrix has made a priority of addressing the remote work market with its software-as-a-service (SaaS) solutions. Its services have been especially attractive during the pandemic. TIBCO is a cloud-native data analytics firm specializing in application programming interfaces (APIs) that link applications and data on premises and across clouds. TIBCO competes across several dimensions of data management and analytics with firms such as Informatica (Nasdaq: INFA), IBM (NYSE: IBM), Microsoft (Nasdaq: MSFT), Oracle (NYSE: ORCL), SAP (NYSE: SAP), and SAS.

According to all parties involved, the combination of TIBCO and Citrix will create a software behemoth with 400,000 customers (involving 100 million users in 100 countries), including 98 percent of the Fortune 500. Citrix will keep its name and headquarters, presumably operating as a partner and common subsidiary of Vista with TIBCO.

Indeed, the Citrix deal is the latest move by Vista toward creating an enterprise software empire based on TIBCO, which it bought for $4.3 billion in 2014. Back in September 2021, Vista offered $1.5 billion for Blue Prism, a workforce automation platform, but was outbid by SS&C Technologies in December.

Citrix Numbers Droop

It may be a providential time for Citrix to merge with TIBCO. Along with the buyout news, Citrix reported its fourth-quarter and full-year 2021 results today, and they’re a mixed bag. For the fourth quarter 2021, the company posted revenue of $851 million, up 5% from last year’s quarter. But for the year 2021, revenues of $3.22 billion were down 1% from 2020.

Unaudited net income for the quarter was $103 million, or $.81 per share, down 8% from last year’s quarter. For 2021, net income of $307 million, or $2.44 per share, was down 39% from 2020.

Part of Citrix’s reduction in earnings seems to have emanated from its $2.25-billion acquisition of SaaS provider Wrike at this time last year. Wrike was a competitor to Slack Technologies, which Salesforce (NYSE: CRM) acquired for $27.7 billion in December 2020. The Wrike deal was overseen by then-CEO David Henshall, who left Citrix in December 2021 after leading the company since 2017.

Financial Details

The Citrix buyout deal is expected to close by the middle of 2022, subject to Citrix shareholder and regulatory approvals. According to the terms, Citrix shareholders will receive $104 in cash per share – representing a 30% premium over Citrix’s share price on December 7, 2021, the last trading day before public speculation started about the transaction.

All told, this deal looks like a positive move for Citrix, which was struggling to get just that bit of momentum it needed to reach the next level of workgroup cloud. Citrix also could boost the fortunes of TIBCO, sharpening that vendor's focus on enterprise workgroup domination.